Donald Trump has hit out at the chair of the US Federal Reserve for not lowering interest rates, stating Jerome Powell's "termination cannot come fast enough".
In a social media post on Thursday, the US president called on the Federal Reserve to cut interest rates, raising concerns that Mr Trump could seek to oust Mr Powell and undermine the institution's independence.
It came after Mr Powell released a statement warning Mr Trump's tariff policies could undermine the US economy.
"[Mr Powell] should have lowered Interest Rates, like the ECB [European Central Bank], long ago, but he should certainly lower them now," Mr Trump posted on his Truth Social platform.
"Powell's termination cannot come fast enough!"
The Fed, like Australia's Reserve Bank, is independent of government and uses inflation and unemployment data to determine interest rates for lenders.
Mr Powell told a group of high-level business executives on Wednesday that the Fed's independence was "very widely understood and supported in Washington".
He drew applause after vowing to resist political pressure when setting interest rates.
Mr Trump in his post said Mr Powell was "always too late and wrong", and critiqued the speech the Fed chair made on Wednesday, calling it "another, and typical, complete mess".
Economists 'less certain' about Powell's future
Officials in the Federal Reserve are now referring to Mr Trump's tariff rollout as an economic "shock" of a sort with no clear historical parallel.
Some Fed policymakers fear the impact on jobs could come quickly, and have said they would be prepared for swift cuts in that case.
Others are concerned the president's policies and erratic handling of the issue could cut inflation expectations loose and force higher interest rates.
Mr Powell's term as Fed chair expires in May 2026, but Mr Trump has threatened to fire him on occasion.
In response to the latest post by the president, economists said they were concerned about how far Mr Trump would go.
"Previously I thought the odds were very much against Trump trying to remove Powell, but my confidence has faded," Natixis chief US economist Christopher Hodge told Reuters.
"The bottom line is the parameters of potential policy outcomes has widened and while I still think Powell will be retained until his term ends, I am less certain that I was previously."
But Homrich Berg market strategist Ross Bramwell said he was sceptical Mr Trump would make a move against Mr Powell.
"He would get some push back from other Republicans in the Senate and the House … even public opinion would probably go against as most people have confidence in the market because of an independent Fed," he said.
"Trump may increase his vocal criticism, but I don't think trying to remove him is likely."
ABC/Reuters
