As the Federal Reserve Open Market Committee (FOMC) concluded its June meeting and Fed Chair Jerome Powell was announcing the Fed was holding the federal funds rate steady at 4.25%-4.50% for the fourth consecutive meeting, Federal Housing Finance Agency (FHFA) Director William Pulte took to social media to criticize Powell and call for his resignation.
“Do your job Jerome Powell, and lower rates. If not, resign and let someone else realize inflation is DOWN and that Americans deserve lower rates. ENOUGH IS ENOUGH,” said Pulte on the social media platform X.
The Trump Administration does not have direct control over the Federal Reserve’s policy decisions, but does have some influence. The President can nominate and appoint members of the Federal Reserve Board of Governors, including the Chair, which can influence the overall direction of the Fed, and can also voice their opinions about monetary policy. The President selects one member of the Board of Governors to serve as Chair of the Board, who also serves as the FOMC Chair. The FOMC, which makes the actual monetary policy decisions, is made up of all seven governors and five of the 12 regional Federal Reserve Bank Presidents. While the Chair has one vote like the other Governors, the structure is designed to prevent one individual, including the President, from dictating decisions and policies.
Powell, dubbed “Too Late” by President Donald Trump and FHFA Director Pulte, was also the target of Trump for not moving rates downward.
“I call him ‘Too Late Powell,’ because he’s always too late,” Trump said to a group of reporters gathered on South Lawn of the White House.
President Trump joined in the criticism of Powell, sounding off on Truth Social: “’Too Late’ Jerome Powell is costing our Country Hundreds of Billions of Dollars. He is truly one of the dumbest, and most destructive, people in Government, and the Fed Board is complicit. Europe has had 10 cuts, we have had none. We should be 2.5 Points lower, and save $BILLIONS on all of Biden’s Short Term Debt. We have LOW inflation! TOO LATE’s an American Disgrace!”
According to news outlet TheHill, President Donald Trump has threatened to fire Powell frequently throughout his two presidential terms, even though federal law prohibits him from doing so in all but extreme circumstances.
Prior to the FOMC’s June meeting, Powell met with President Trump at the White House to discuss the state of the nation’s economy, employment, and inflation.
“Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” said the FOMC in a statement after the White House meeting. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”
White House Press Secretary Karoline Leavitt confirmed the meeting between Trump and Powell, telling a group of reporters that the Fed’s summary was correct, but noting that Trump pushed Powell to lower rates.
“The President did say that he believes the Fed Chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries. The President’s been very vocal about that, both publicly and now I can reveal privately as well,” Leavitt said in a briefing with the press.
Pulte continued his posts on Powell, noting that the Fed should be setting their interest rate environment with the health of the nation’s housing market in mind.
“Funny thing is Jay Powell is talking right now about the housing market—he has no clue what he can do for the housing market. And he’s not listening to the people who help lead the housing market. Too Late needs to RESIGN,” continued Pulte on X.
He followed up, “As Chairman of Fannie Mae and Freddie Mac, I can tell you that Jay Powell is hurting the housing market by being Too Late to lower rates. He needs to resign, effective immediately.”
The Federal Reserve recently hosted its Thomas Laubach Research Conference, a component of the Fed’s review of its monetary policy strategy, tools, and communication, where Chairman Powell discussed how the FOMC will begin to analyze its framework, and the methods used to set interest rate policy and communicate it to the public, marking the first time the Fed will do so since 2020.
“We will reconsider aspects of our strategic framework in light of the experience of the last five years,” said Powell in his opening remarks. “We will also consider possible enhancements to the Committee’s [FOMC] policy communication tools regarding forecast uncertainty.”
The Fed’s current monetary policy framework was crafted in an environment of low inflation and interest rates bordering the zero percent range. Under these conditions, the Fed keyed in more on the risk of being unable to stimulate the job market than on how to respond to inflationary concerns.
“We provide our monetary policy framework in a document entitled the Statement on Longer-Run Goals and Monetary Policy Strategy, which we refer to as the consensus statement, the language in the opening paragraph, which has never changed, articulates our commitment to fulfilling our Congressional mandate and explains clearly what we’re doing and why that clarity reduces uncertainty, improves the effectiveness of our policy and enhances transparency and accountability,” explained Powell.
