A Feud with the Fed: Trump and Powell Clash

April 21st, 2025

Brogan Jones

Following Donald Trump’s victory in the Presidential election last November, the executive branch seemed to be headed for an overhaul, with Trump sure to replace current officials and shape the government to carry out his new agenda. However, two days after it became official that Trump would once again be the President of the United States, one government official in particular issued a bold challenge to Trump’s authority. Jerome Powell, who has served as chairman of the Federal Reserve since 2018, was asked on November 7 of last year if he would step down from his position if Trump asked him to, a question prompted by Trump positing the idea of firing Powell in his first term. Powell made it clear that he would not step down, emphasizing that the President lacked the power to force his termination. While at the time, this was merely a hypothetical question, Powell’s answer seems to have foreshadowed a clash between the two men that has come to fruition mere months into Trump’s second term.

Jerome Powell, who has been revered as holding historic power over the nation's economy for the past several years, specifically through his ability to set interest rates, is not holding his tongue when it comes to the Trump administration’s economic policy. In an event in Chicago this past week, Powell stated that fundamental policy changes from the Trump administration would make cutting interest rates a bad decision. Powell was specifically referring to Trump’s infamous tariffs, which other officials from the Federal Reserve have stated are likely to drive up inflation and unemployment, which would increase the need for interest rates remaining high. In response to Powell’s statement, Trump accused him of “playing politics” and wrote in a more in-depth statement made to Truth Social that, “The (European Central Bank) is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess’.”

Trump and Powell’s starkly different visions of what’s best to protect American consumers has not only put the fate of the U.S. economy in jeopardy, but has also brought into question the President’s control over governmental agencies and just how much influence Trump holds over the nation’s economy. Returning to the previously far-off discussion about whether or not Trump had the authority to terminate Powell as chair of the Fed, Trump once again threatened to remove Powell from his position, stating that his “termination cannot come fast enough.” While Powell’s term is currently set to expire in May of 2026, only time will tell if his rapidly worsening relationship with the President will actually lead to his removal. The relationship between the Presidential administration and the Federal Reserve is a complicated one, and the notion of a President removing a sitting Fed chair is legally complex and practically untested. When determining who will come out on top of the government’s most recent economic schism, all eyes remain on the Fed, as American consumers await the agency’s continued response to the economic policy of the Trump administration.

Extemp Analysis by Brogan Jones

A big focal point of the first few months of Donald Trump’s second term has been his economic policy. It’s also sure to be the subject of many U.S. extemp questions. Trump’s most recent interaction with the federal reserve is sure to pop up, possibly in the form of the question: What does Trump’s feud with the Federal Reserve signal for the American economy?

AGD: I think the best approach with this topic is to start the speech off funny. Personally, I usually like to open up a speech about Trump (that isn’t related to a super serious topic) with a Trump impression. But if you’re worried your impression isn’t up to par or that your judges are going to be sick of hearing high schoolers give back-to-back poor attempts at a Trump impression, then opening with any sort of joke that somehow relates to the economy or Trump could be a solid way to open the speech. I think a good one could be referencing Trump’s line about how “We’re going to win so much, you’re going to get tired of winning,” then talk about how prices of goods have risen and the stock market is crashing and go, “Please, Mr. President, it’s too much winning!” But really, anything that breaks the ice and gets your judge engaged will work for this one.

B: For background, you’ll want to briefly mention what this feud entails. Of course, you’ll likely go into more detail on this later in your speech.

SOS: Since this isn’t really a yes or no question, it’d be good here just to state that Trump’s feud with the Fed is indicative of a larger economic trend for the future of the nation.

My answer would be that the feud signals economic turmoil and uncertainty, but also readiness from agencies to respond to Trump’s economic policy. The feud demonstrates this in three key ways…

P1: Economic experts predict poor economic results from Trump’s policies

1. As mentioned in the article, Fed officials, some of the most economically-sound minds in the nation, believe that Trump’s tariffs will cause inflation and unemployment

P2: Agencies like the Fed are ready to respond to these results

Powell’s defiance in lowering interest rates proves that the Fed is ready to respond to these results

1. Powell’s unwillingness to step down and determination to stay in his position showcases he is ready to fight Trump’s economic policy
2. While this showcases hope in fighting economic turmoil, there is also uncertainty…

P3: Trump administration is attempting to expand its economic power

Trump very badly wants Powell out of the Fed so that he has no challengers on the economy
As the article mentions, Trump could possibly have the right to remove Powell, since it is a legal gray area

So, Trump’s feud with the Federal Reserve and specifically its chair Jerome Powell, displays that the U.S. is headed for economic turmoil per the word of the nation’s top economic experts, that agencies like the Federal Reserve are ready to respond to this turmoil, and that despite this, the Trump administration is attempting to undermine these agencies and expand its economic power.