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The White House just took its most aggressive stance yet against Jerome Powell

CNN's profile
Original Story by CNN
July 10, 2025
The White House just took its most aggressive stance yet against Jerome Powell

Context:

The Trump administration has escalated its campaign against Federal Reserve Chair Jerome Powell, with accusations from Russell Vought, the director of the Office of Management and Budget, alleging legal violations and mismanagement regarding a $2.5 billion renovation of the Fed's headquarters. President Trump, who appointed Powell, has consistently criticized him for not lowering interest rates in response to inflation concerns and has even suggested Powell's resignation. Despite these attacks, Powell has maintained that the Federal Reserve's focus is on controlling inflation and ensuring labor market health, without political influences. Analysts speculate that the administration may be attempting to create a scenario where Powell could be fired 'for cause,' although such a move could undermine market confidence in the Fed's independence. Other administration officials have joined in the criticism, further intensifying the pressure on Powell and questioning his leadership of the Federal Reserve.

Dive Deeper:

  • Russell Vought accused Jerome Powell of legal violations related to oversight regulations and claimed he lied to Congress about a significant renovation project at the Federal Reserve's headquarters.

  • President Trump has been vocal in his criticism of Powell, calling him derogatory names and suggesting that Powell failed to address the 2022 inflation crisis adequately by not reducing interest rates.

  • Powell has refrained from engaging with the criticisms, emphasizing that the Federal Reserve aims to manage inflation and support the labor market, independent of government financial concerns.

  • The Trump administration's actions may be aimed at justifying Powell's potential dismissal, which analysts warn could destabilize financial markets due to concerns over the Fed's independence.

  • In addition to Vought, other Trump administration officials, like Peter Navarro and Bill Pulte, have publicly criticized Powell, increasing the pressure on his position and leadership capabilities.

  • Despite interest rate cuts by other central banks, the Federal Reserve has maintained its rates, citing the need to assess the impact of previous policy changes initiated under Trump's administration.

  • Analyst Ed Mills noted that the Supreme Court's stance likely prevents the president from firing Powell without cause, suggesting the administration might be trying to provoke Powell's resignation instead.

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