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Trump’s increasingly aggressive attacks on Powell aren’t what you think
Trump’s
increasingly aggressive attacks on Powell aren’t what you think
Phil
Mattingly
Analysis by
Phil Mattingly, CNN
9 minute read
Updated 7:42
PM EDT, Fri July 11, 2025
https://edition.cnn.com/2025/07/11/business/jerome-powell-trump-fire
—
President
Donald Trump’s attacks on Federal Reserve Chair Jerome Powell are so
commonplace at this point that they barely register in financial markets these
days. The rapidly intensifying multi-pronged efforts by Trump’s advisers to
amplify and expand on Trump’s attacks are a good reason to rethink that
indifference.
White House
advisers are now unequivocally engaged in a coordinated effort to dramatically
ramp up the pressure on Powell in public statements and through bureaucratic
moves designed to give Trump more leverage.
That
leverage, sources say, isn’t designed to trigger Powell’s removal — at least
not at the moment.
But with
Trump’s frustration over the Fed’s refusal to bow to his pressure to lower
rates growing by the day, it is the most consequential step taken thus far to
bring that threat to Powell’s doorstep.
It also
serves as the clearest window into the expanding effort to change Powell’s and
the Federal Open Market Committee’s insistence on independence. Just three
weeks ago, Trump candidly acknowledged his attempts had failed.
“I call him
every name in the book trying to get him to do something,” Trump said,
expressing bewilderment over Powell’s impervious response to his powers of
persuasion. “I do it every way in the book. I’m nasty. I’m nice. Nothing
works.”
Trump’s
advisers are now showing they aren’t giving up.
An
escalation of a familiar playbook
The speed
with which the campaign against Powell escalated on Thursday was equal parts
jarring and foreseeable for a White House that has approached Trump’s second
term with a maximalist view of executive authority and a granular understanding
of the statutory and bureaucratic tools to further that view.
Office of
Management and Budget Director Russell Vought triggered that sequence with a
letter to Powell, which he posted publicly on social media, suggesting Powell
may have broken the law in his stewardship of a planned renovation of the Fed’s
headquarters.
Federal
Reserve Board Chair Jerome Powell holds a news conference following a policy
meeting on June 18 in Washington, DC. President Donald Trump has been
pressuring Fed officials to lower interest rates.
Vought’s
letter cites Powell’s congressional testimony last month and its connection to
the National Capital Planning Act, which requires renovation projects to be
approved by the National Planning Commission.
Vought
framed his letter as an effort to better understand the Fed’s renovation
project amid concerns about its cost and Powell’s description of the project in
his testimony.
“We will be
asking tough questions with regard to the Fed,” Vought told reporters Friday
morning. “But this is about the president being offended at cost overruns, he’s
a developer.”
But when
asked if Trump wanted to see the Fed maintain its independence, Vought called
the question “immaterial.”
“The
president has a policy view with regard to we need lower rates,” Vought said.
“He has a policy view with regard to the fact Jerome Powell has been late
repeatedly. The Fed has been mismanaged.”
Vought’s
letter coincided with a quiet move to replace three members of that planning
commission with loyalists, a source told CNN’s Kristen Holmes. All were sworn
in ahead of the commission’s meeting Thursday evening.
The moves
carry the hallmarks of a familiar playbook utilized by Trump and his top
political aides over the course of the last decade.
It starts
with a little noticed allegation of malfeasance leveled by Capitol Hill allies
against an opponent, which is then seized upon, amplified and then utilized as
the basis of an investigation that at the very least can be utilized to
delegitimize or serve as the basis for more consequential action.
The central
involvement of Vought, who is viewed as one of Trump’s most loyal,
knowledgeable and deeply effective lieutenants, represents an escalation in and
of itself.
“I think
political appointees have to be really aggressive in going back to underlying
statutes to see what is possible,” Vought said in an interview last year on the
podcast Statecraft, in what he described as one of his governing philosophies.
“It should not merely be a matter of preserving the status quo or asking
Capitol Hill, ‘Mother, may I?’ The president has to manage his political
capital, but you need to give him options consistent with the law.”
The Fed on
Friday published a “Frequently Asked Questions” page about its planned
headquarters renovation, pushing back on many recent claims about cost or other
features of the renovation. The page included photos of leaks in the building,
foundation cracks and previous efforts to contain asbestos.
“The Federal
Reserve takes seriously the responsibility to be a good steward of public
resources,” the page said.
The Fed
declined to comment further, including a CNN question about whether the page
was a response to Vought.
No active
effort to fire Powell
White House
officials say there isn’t an active effort underway to try and remove Powell, a
longstanding Trump fixation that advisers have dissuaded him from pursuing due
to significant concerns over legal constraints and market reaction.
Trump
reiterated on Friday that he’s not going to remove Powell. Asked by CNN’s Kit
Maher if he planned to fire the Fed chair after the administration ramped up
attacks against him Thursday, Trump replied from the South Lawn of the White
House: “No, I think he’s doing a terrible job.”
When CNN
pressed if Trump would fire him, he repeated: “No.”
Those
concerns haven’t diminished, however, particularly in the wake of a Supreme
Court ruling in May underscoring Trump’s power to remove executive officials.
The court, however, explicitly made the point that Trump’s authority did not
extend to the Federal Reserve, which it described as a “uniquely structured,
quasi-private entity” warranting special independence.
Powell says
the Fed would have cut rates this year if it weren’t for tariffs
The more
acute risk — and, sources say, the primary reason for Trump’s reticence to act
against Powell — is the expectation that any move would immediately trigger a
significant market sell-off.
The
inevitable lengthy, complex and fraught legal battle that would play out given
Powell’s position that he would fight any removal in court, would likely
consume a stable and resilient US economy for months.
“If there
were an effort by the president to remove the chair, the market reaction would
be very significant — well before any court had an opportunity to pass on the
issue,” former Fed Governor Daniel Tarullo said in an April interview with
Harvard Gazette. “The anticipated market effect is a disincentive to try to
remove the chair, no matter how unhappy the administration may be with his
policies.”
Building
pressure
While some
Trump advisers — including Vought prior to this administration — have
questioned the statutory basis for the Fed’s independence, there is a clear
sensitivity within the administration about the market response.
That
sensitivity was underscored by one of Trump’s most consequential actions to
expand his own authority: an executive order placing government agencies long
viewed as independent explicitly under his purview.
Buried
within that order was a critical caveat: “This order shall not apply to the
Board of Governors of the Federal Reserve System or to the Federal Open Market
Committee in its conduct of monetary policy.”
That reality
hasn’t changed, officials say, underscoring the extent to which the latest
moves are more about leveraging pressure on both Powell and the other voting
members of the Federal Open Market Committee.
“We’re aware
Powell doesn’t make the decision on his own,” an administration official told
CNN last week. “Our view is that voting members have the responsibility to look
at the data regardless of his view — and we think the data supports our case.”
Replacing
Powell
That
position has been bolstered by the ongoing race to replace Powell, whose term
as chair is up next year.
Kevin Warsh,
who people familiar with the matter say is one of the three candidates viewed
as most likely to get the nod from Trump, argued this week on Fox Business
Network that tariffs are not inflationary and that the US economy was being
held back by “bad economic policies coming from the central bank.”
Kevin
Hassett, Trump’s National Economic Council Director and another top candidate,
has made similar arguments based on economic data. Ironically, it was Hassett,
in his role as chairman of the Council of Economic Advisers in Trump’s first
term, who played an integral role in convincing Trump not to fire Powell after
quietly researching the question with White House lawyers.
“We found
that it may not have been possible for the president to fire him and told him
in the Oval Office,” Hassett wrote in his memoir of his time in the first Trump
administration. “We could maybe fire him as chairman, but he would be able to
stay on as a member of the board. The other members could decide to treat him
as chairman, and that would be as far as matters could go.”
A
coordinated effort
While
Trump’s anger over Powell, who he selected for chair in his first term, is
longstanding, the aggressive public attacks on his policy views had been
primarily his own.
But the
frustration Trump candidly acknowledged last month over his ineffective
one-man, one-sided rhetorical warfare against Powell appeared to immediately
spark his allies to join the fight.
“The
president has been saying this for a while, but it’s even more clear: the
refusal by the Fed to cut rates is monetary malpractice,” Vance wrote in a post
on X shortly after Trump’s comments.
Bill Pulte,
the director of the Federal Housing Finance Agency who has been sharply
critical of the Fed chair for weeks, called on Powell to resign a few hours
after Trump’s remarks.
The effort
has grown more intense in the last week.
Peter
Navarro, one of Trump’s longest serving advisers and senior counselor for trade
and manufacturing, published an opinion column in The Hill newspaper headlined
“Jay Powell is competing to be the worst Fed chair in history,” and then
proceeded to appear on Newsmax, Scripps, CNBC and Fox Business to discuss the
piece.
Navarro’s
appearance on TV is always noted on Wall Street — his role as Trump’s most
hawkish trade adviser often signals a harder line on tariff policy from the
administration. But Navarro repeatedly made clear he didn’t want to focus on
tariffs and had no intention of getting in front of the president on the issue.
He wanted to
talk about Powell.
Commerce
Secretary Howard Lutnick, asked about Powell on Newsmax, wasn’t subtle either.
“He’s got to
change and he’s got to go,” Lutnick said. That statement in past
administrations would’ve been extraordinary for a cabinet official.
It barely
registered this week.
The ultimate
goal, however, isn’t about Powell’s removal, advisers say. Instead, it’s about
driving the message and pressure on Fed board members ahead in the lead-up to
their next meeting.
It’s a
strategy best captured by Treasury Secretary Scott Bessent, who is Trump’s top
economic adviser and a critical messenger to Wall Street and foreign investors.
Bessent, in
an interview on Fox News Sunday on July 6, pointed to the differing approach of
two legendary college basketball coaches to explain Trump’s approach.
“There’s the
Bobby Knight school and the Dean Smith school,” Bessent said, citing the fiery
former Indiana University coach and more refined and controlled University of
North Carolina legend. “Obviously, the president is in the Bobby Knight school
and I will tell you, Bobby Knight won 3 national championships and Dean Smith
only won 2, so working the refs seems to be effective.”
CNN’s
Kristen Holmes, Kit Maher and Samantha Delouya contributed to this report.
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