FILE PHOTO: U.S. President Donald Trump gestures while wearing a hat that reads "Gulf of America", as he departs the White House, in Washington, D.C., U.S., April 20, 2025. REUTERS/Ken Cedeno/File Photo
President Donald Trump was raked over the coals by the Wall Street Journal editorial board on Monday, over his escalating attacks on Federal Reserve Chairman Jerome Powell for not lowering interest rates to his satisfaction.
The conservative board, which has frequently laid into Trump for his tariff wars and other controversial economic policies, is speaking out after Trump attacked Powell as "Mr. Too Late" and accused him with no evidence of manipulating interest rates to interfere in the 2024 presidential election.
"Monday was the first full trading day for markets to absorb National Economic Council director Kevin Hassett’s comments Friday that the White House is studying if Mr. Powell can legally be fired," wrote the board. "On Monday Mr. Trump demanded again that Mr. Powell make “pre-emptive” interest rate cuts to avoid a slowdown. Cue the meltdown in stocks, bonds and the dollar, a trifecta of declining confidence. Mr. Trump is furious that Mr. Powell has said publicly that tariffs will likely lead to higher inflation and slower growth."
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Trump doesn't really have the authority to fire Powell, noted the board, and in any case he would have to remove more Fed officials in droves to actually get a majority to lower interest rates — but there's a deeper issue at hand.
"The Powell Fed’s policy is hardly tight in any case. He’s in the process of ending quantitative tightening by no longer shrinking the Fed balance sheet, which amounts to easing. His public message is that the tariffs make fulfilling the Fed’s twin mandates more difficult. That’s undeniably true," wrote the board. "The tariffs will cause at least a one-time increase in the price of tariffed goods, which may become more entrenched if the Fed accommodates them by cutting rates. Meanwhile, they are increasing uncertainty for businesses and consumers, which will slow the economy and hiring."
The simple fact is, the board continued, "Mr. Trump thinks he can bully everyone into submission, but he can’t bully Adam Smith, who deals in reality. Markets know tariffs are taxes, and taxes are anti-growth. The Trump tariffs are the biggest economic policy mistake in decades, and extending the 2017 tax reform and deregulation may not compensate for all the damage."
Furthermore, the board concluded, "markets are spooked because they don’t know if Mr. Trump listens to anyone but his own impulses."