President Donald Trump took aim Tuesday morning at Federal Reserve Chairman Jerome Powell, sharpening his criticism just days after Powell disclosed he is under investigation by the Trump administration’s Department of Justice.
In a post on Truth Social, Trump seized on newly released economic data, declaring that inflation numbers were “great” and arguing they should prompt immediate action from the Fed. Trump again branded Powell as “Too Late,” insisting that interest rates should be cut “meaningfully.” He also highlighted what he described as strong growth numbers, crediting tariffs for the performance and signing off with his customary flourish.
The comments followed a report earlier Tuesday from the Bureau of Labor Statistics showing that the Consumer Price Index rose at an annualized rate of 2.7 percent in December, matching the increase recorded in November. The data offered fresh ammunition in the ongoing debate over whether inflation has cooled enough to justify rate cuts.
Some analysts cautioned that inflation pressures remain persistent. Seema Shah, chief global strategist at Principal Asset Management, told CBS News that core personal consumption expenditures inflation has stayed above the Federal Reserve’s 2 percent target for more than four years. Others were even more skeptical about near-term rate relief. Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said the latest inflation report does not provide the Federal Reserve with what it needs to lower interest rates later this month.
Powell, however, has framed the controversy around him in far broader terms. On Sunday, he announced that he is facing a criminal investigation related to testimony he gave before Congress last June. In a video statement, Powell suggested the investigation is retaliation for his refusal to cut interest rates as Trump has repeatedly urged.
According to Powell, the issue goes beyond his own position and strikes at the heart of central bank independence. He said the investigation raises the question of whether the Federal Reserve will continue setting monetary policy based on economic evidence and conditions, or whether it will be steered by political pressure or intimidation.
The probe has drawn criticism from several Republicans, who have voiced concern about its implications. Sen. Thom Tillis said the investigation removes any remaining doubt that some advisers within the Trump administration are seeking to undermine the Fed’s independence. Tillis argued that the credibility of the Justice Department itself is now at stake and vowed to oppose confirmation of any Federal Reserve nominees, including the upcoming chair vacancy, until the matter is resolved.
Senate Majority Leader John Thune also weighed in, saying he has not yet reviewed the case or allegations but warned that any charges must be legitimate and serious.
The clash underscores a broader tension between the White House and the central bank as Trump continues to press for looser monetary policy, arguing it would boost growth and reward what he sees as successful economic policies. Powell, meanwhile, has maintained that the Fed must remain focused on inflation and economic data, even as political pressure intensifies.
With inflation still hovering above the Fed’s target and an investigation now hanging over the central bank’s leadership, the standoff between Trump and Powell shows no sign of easing, setting the stage for an even more contentious debate over interest rates and economic policy in the weeks ahead.
