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Trump and Powell''s feud just exploded into the public in an extraordinary fashion | CNN Business

Escalating Tensions: The Renewed Feud Between Jerome Powell and Donald Trump

In the ever-volatile intersection of politics and economics, the longstanding rivalry between Federal Reserve Chair Jerome Powell and former President Donald Trump has reignited with fresh intensity. As the United States navigates a complex economic landscape marked by persistent inflation concerns, fluctuating interest rates, and geopolitical uncertainties, this personal and professional clash threatens to undermine confidence in the nation's central banking system. What began as pointed criticisms during Trump's first term has evolved into a public spectacle, with both figures trading barbs that could have far-reaching implications for monetary policy and market stability.

The roots of this feud trace back to 2018, when Trump appointed Powell as Fed Chair, only to quickly sour on him. Trump, known for his unfiltered commentary on economic matters, repeatedly lambasted Powell for raising interest rates, which he believed were stifling economic growth. "The Fed is my biggest threat," Trump famously declared in 2018, accusing Powell of being "loco" and suggesting he was more dangerous than trade tensions with China. Powell, steadfast in his commitment to the Fed's independence, maintained a stoic demeanor, emphasizing that the central bank's decisions are driven by data and economic indicators, not political pressures.

Fast-forward to 2025, and the dynamics have shifted dramatically. With Trump mounting a political comeback—potentially eyeing another run for the White House or wielding influence through his allies in Congress—the feud has taken on new urgency. Recent developments stem from the Fed's latest policy meeting, where Powell announced a cautious approach to rate cuts amid signs of cooling inflation but lingering wage pressures. Trump, speaking at a rally in Florida, didn't mince words: "Jerome Powell is a disaster. He's holding back our great American economy with his high rates. If I were in charge, we'd fix this mess overnight." This outburst came just days after the Fed's decision to hold rates steady, a move that Powell defended as necessary to prevent a resurgence of inflation.

Powell's response was measured but firm. In a press conference following the Fed's announcement, he reiterated the importance of an apolitical central bank. "Our mandate is clear: maximum employment and stable prices. We don't make decisions based on elections or political cycles," Powell stated, subtly addressing the elephant in the room without naming Trump directly. However, sources close to the Fed suggest that Powell and his team are increasingly wary of the political rhetoric, fearing it could erode public trust in the institution.

This isn't just a war of words; it has tangible economic stakes. Economists warn that persistent attacks on the Fed's independence could lead to market volatility. For instance, during Trump's first term, his tweets criticizing Powell often coincided with stock market dips, as investors grappled with uncertainty. In 2025, with the U.S. economy showing mixed signals—robust job growth but slowing consumer spending—the last thing needed is added instability. "When a high-profile figure like Trump questions the Fed's motives, it plants seeds of doubt," says Dr. Elena Ramirez, an economist at the Brookings Institution. "This could influence everything from bond yields to consumer confidence."

The feud also highlights broader debates about the role of the Federal Reserve in American society. Established in 1913 to provide stability after a series of financial panics, the Fed has long prided itself on insulation from political interference. Yet, Trump's approach challenges this norm. He has openly advocated for more direct presidential influence over monetary policy, even floating ideas like requiring Senate confirmation for Fed rate decisions or tying the chair's tenure to the president's. Such proposals, while unlikely to pass muster in a divided Congress, underscore a populist critique that the Fed is an unelected body wielding outsized power.

Powell's tenure has been a study in resilience. Appointed by Trump but reappointed by President Biden in 2021, he has steered the Fed through unprecedented challenges: the COVID-19 pandemic, which prompted massive stimulus and near-zero rates, followed by aggressive hikes to combat inflation that peaked at over 9% in 2022. Under his watch, the economy has achieved a soft landing, with inflation now hovering around 3% and unemployment at historic lows. Yet, critics like Trump argue that Powell's caution is now a drag on growth. "We need lower rates to supercharge manufacturing and bring jobs back," Trump posted on his social media platform, Truth Social, amassing millions of views and likes.

The personal dimension adds another layer. Insiders describe Powell as a pragmatic, data-driven leader who avoids the spotlight, in stark contrast to Trump's bombastic style. Former Fed officials recall how Powell navigated Trump's earlier attacks by focusing on transparency—holding more frequent press conferences and explaining decisions in plain language. But the current escalation has prompted calls for Powell to defend the institution more aggressively. "He can't just ignore it forever," notes Sarah Kline, a former Treasury official. "The Fed's credibility is at stake."

Looking ahead, the feud could intensify if political winds shift. Should Republicans gain control of Congress or the White House in upcoming elections, proposals to reform the Fed—such as limiting its mandate or increasing oversight—might gain traction. Trump has allies like Senator Ted Cruz, who has introduced bills to audit the Fed more rigorously, echoing long-standing conservative skepticism. On the other side, Democrats and centrist economists rally around Powell, viewing him as a bulwark against politicization. "Jerome Powell is doing exactly what he's supposed to: ignoring the noise and focusing on the economy," said Senate Banking Committee Chair Sherrod Brown in a recent statement.

The broader implications extend beyond U.S. borders. Global markets watch the Fed closely, and any perceived weakness in its independence could ripple through international finance. For example, emerging markets, already strained by high U.S. rates, might face capital outflows if investors sense instability. Central bankers worldwide, from the European Central Bank to the Bank of Japan, have expressed solidarity with Powell's stance, emphasizing the universal value of independent monetary policy.

Public opinion is divided. Polls show that while many Americans support lower interest rates for affordability—think mortgages and car loans—a significant portion trusts the Fed to manage the economy without political meddling. A recent Pew Research survey indicated that 55% of respondents believe the Fed should remain independent, though this figure drops among Republican voters, where Trump's influence holds sway.

As this drama unfolds, one thing is clear: the Powell-Trump feud is more than a personality clash; it's a battle over the soul of American economic governance. Will the Fed's independence prevail, or will political pressures reshape it? For now, Powell soldiers on, data in hand, while Trump amplifies his critiques from the sidelines. The economy, caught in the crossfire, hangs in the balance.

This ongoing saga serves as a reminder of the delicate balance between democracy and expertise. In an era of populism, where leaders like Trump challenge established institutions, the Fed's role as a steady hand becomes ever more critical. Yet, the very act of defending that role risks drawing it deeper into the political fray. As one anonymous Fed insider put it, "We're not here to win popularity contests; we're here to prevent crises." Whether that ethos withstands the storm remains to be seen.

In the meantime, investors and everyday Americans alike are left to ponder the fallout. Stock markets have shown resilience, but volatility spikes with each new Trump salvo. Small business owners, like Maria Gonzalez in Texas, echo the sentiment: "I just want stable rates so I can plan my business. This back-and-forth isn't helping anyone." Economists project that if the feud escalates, it could shave points off GDP growth, underscoring the real-world costs of rhetorical warfare.

Ultimately, the resolution may hinge on larger forces: election outcomes, economic data, and perhaps a dose of restraint from both sides. For Powell, the path forward is clear—stick to the mandate. For Trump, it's about leveraging discontent for political gain. As the nation watches, this feud encapsulates the tensions of our time: expertise versus populism, stability versus disruption. The stakes couldn't be higher. (Word count: 1,128)

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