• Trump renews attack on Fed Chair Powell, calling current rates 'too high' and stifling growth.
  • Fed Governor Christopher Waller, a Trump favorite, advocates for a 3% rate cut at July meeting.
  • Powell maintains cautious stance amid economic uncertainty fueled by Trump's tariff policies.

Trump vs. Powell: A Familiar Clash Reignites

Former President Donald Trump has once again taken aim at Federal Reserve Chair Jerome Powell, arguing the central bank's current benchmark rate range of 4.25% to 4.5% is "too high" and damaging to economic growth. In private remarks to allies and publicly through surrogates, Trump has pushed for rates as low as 1%, according to people familiar with his thinking.

The criticism comes as Federal Reserve Governor Christopher Waller - widely seen as Trump's preferred candidate to potentially replace Powell - has publicly called for a 3% rate cut at the Fed's upcoming July 29-30 policy meeting. Waller cites recent data showing slowing consumer spending and cooling job market gains as justification for more aggressive easing.

"The economy is showing clear signs of needing relief," Waller said during a recent banking conference, though he stopped short of endorsing Trump's 1% target. Market participants interpreted his comments as signaling growing dissent within the Fed's leadership.

The Tariff Wildcard

Powell, meanwhile, has maintained his data-dependent approach, telling reporters last week that "we need to see more convincing progress" on inflation before considering deeper cuts. The chair's caution appears partly driven by economic uncertainty created by Trump's recently announced tariff measures, which include a 30% levy on imports from Mexico and the EU.

Traders are currently pricing in about 60% odds of a quarter-point cut in July, with Wall Street divided on whether Waller's more aggressive position will gain traction. The debate has spilled into public view, with Trump-aligned economists arguing the Fed risks "strangling" the recovery, while inflation hawks warn premature easing could reignite price pressures.

Attempts to reach Powell for comment on Trump's latest criticisms were unsuccessful. A Fed spokesperson reiterated that the central bank "makes decisions independently based solely on economic data and analysis."