Trump Criticizes Fed Chair Powell Amidst Economic Uncertainty

The Federal Reserve and the Office of the Comptroller of the Currency have approved Capital One Financial's $35.3 billion all-stock acquisition of Discover Financial Services. The deal, announced in February 2024, will expand Capital One's deposit base and credit card offerings, with Discover shareholders receiving 1.0192 Capital One shares for each Discover share. As a condition of the merger, Capital One must comply with the Fed's action against Discover, including repaying customers overcharged interchange fees and taking corrective actions to address outstanding enforcement actions. The deal is expected to close on May 18.

President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell, stating that Powell should lower interest rates, saying "He should bring them down." Trump's comments come as the White House has increased its attacks on Powell, with White House economic adviser Kevin Hassett suggesting that the administration is assessing whether they can remove Powell from his position. Powell had previously stated that he cannot be fired under law and plans to serve through the end of his term in May 2026. The tension between Trump and Powell stems from Powell's comments on Trump's tariff plan, which Powell said could drive up inflation and create challenges for the central bank.

Donald Trump's criticism of Federal Reserve Chairman Jerome Powell has intensified, with Trump expressing his unhappiness with Powell's handling of interest rates and warning that he could fire him. Trump's anger stems from Powell's refusal to lower interest rates, despite Trump's repeated demands, and his warning that Trump's tariffs could lead to inflation and higher unemployment. The Fed has paused its rate-cutting strategy amid concerns over economic uncertainty, which has been exacerbated by Trump's tariff and trade-war policies. Trump's attacks on Powell have raised concerns about the independence of the Federal Reserve and the potential for market turmoil if the president were to manipulate interest rates for political gain. Senator Elizabeth Warren has defended Powell, arguing that his independence is crucial to maintaining the stability of the US financial system.

President Donald Trump's tariffs may be resetting the global economic order, with the US transforming from a stable economy and trusted trade partner to a source of confusion and doubt. Trump's imposition of tariffs on various countries, including China, Mexico, and Canada, has created uncertainty and undermined confidence globally. The tariffs have been swift and deep, with Trump levying and then walking back tariffs, causing whiplash for businesses and nations. Other countries, such as China, are diversifying their trading relationships beyond the US, and the European Union is strengthening its ties with other nations, including Canada and India. The changes have been described as "fundamental" by Federal Reserve Chair Jerome Powell, and Moody's Ratings warns that the tariffs will likely slow global economic growth significantly. As a result, companies and individuals are already feeling the effects, from chipmakers to consumers shopping for cheap clothing. The shift is seen as a move towards a more multipolar world, with the EU emerging as a more reliable and predictable partner.

President Donald Trump has expressed his desire to replace Federal Reserve Chair Jerome Powell, stating that his "termination can't come fast enough." Kevin Warsh, a former Fed governor, is reportedly the leading contender to succeed Powell, either at the end of his term in May 2026 or earlier. Warsh served as a Fed governor during the Great Recession and has since been a vocal critic of the Fed's monetary policies. He has also advised Trump's transition team on economic policy and has written op-eds criticizing the Fed's handling of inflation. Warsh's views on inflation align with Trump's, attributing it to excessive government spending and the Fed's monetary policies. Trump has considered Warsh for other roles, including Treasury secretary, and his selection of Scott Bessent for that position may have been a strategic move to keep Warsh available for the Fed chair role.

The article highlights five key takeaways from the week, focusing on President Trump's administration. The main issues discussed include the case of Kilmar Abrego Garcia, a Maryland man who was illegally deported to El Salvador, and the subsequent tension between the Trump administration and the judiciary. The administration's handling of the case has led to accusations of "willful disregard" for court orders and raised concerns about a potential constitutional crisis. Other key points include the impact of Trump's tariffs on inflation, with Federal Reserve Chair Jerome Powell warning of higher prices, and the controversy surrounding Robert F. Kennedy Jr.'s role as Health and Human Services secretary, particularly his views on vaccines and science. The administration's messaging around Abrego Garcia's case has also been called into question, with some arguing that it is an attempt to distract from the facts of the case. Overall, the week's events have highlighted the ongoing tensions between the Trump administration and the judiciary, as well as concerns about the administration's policies and their potential consequences.

President Trump criticized Federal Reserve Chair Jerome Powell, accusing him of "playing politics" and moving too slowly to lower interest rates, but advisers warned that firing Powell could cause financial market volatility. Trump's tariffs have already unsettled markets, and undermining the Fed's independence could lead to a significant financial panic. Trump has privately expressed concern about a potential economic downturn, and his advisers have cautioned that firing Powell is both legally and financially complicated. While Trump has threatened to fire Powell, he has not seemed serious about doing so imminently, and the Fed's independence is seen as crucial to economic stability.