Trump suggests he can remove Fed Chair Powell and says he's 'not happy' with him over interest rates

WASHINGTON (AP) — President Donald Trump attacked Federal Reserve Chair Jerome Powell on Thursday for not cutting interest rates and said he could fire him if he wanted to, renewing a threat from his first term that could cause a major legal showdown over the issue of the central bank's long-standing political independence.

“If I want him out, he’ll be out of there real fast, believe me," Trump said in the Oval Office while taking questions from reporters during a visit with Italian Prime Minister Giorgia Meloni. “I'm not happy with him.”

Trump's comments followed a posting on his social media site in which the Republican president called on Powell to lower the Fed's short-term interest rate and said, "Powell’s termination cannot come fast enough!” The Fed chair's term ends in May 2026.

Powell was initially nominated by Trump in 2017 and was appointed to another four-year term by Democratic President Joe Biden in 2022. At a November news conference, Powell indicated he would not step down if Trump asked him to resign and, in remarks Wednesday, made clear that “our independence is a matter of law.” He added: “We’re not removable except for cause. We serve very long terms, seemingly endless terms.”

Trump's criticism stems from his view that, as he said Thursday, “we have essentially no inflation." The Fed sharply raised rates in 2022 and 2023 to slow borrowing and spending and tame inflation, which dropped steadily from a peak of 9.1% in 2022 to 2.4% last month. Inflation is not far from the Fed's target of 2%. The Fed even cut rates three times at the end of last year.

But since then, Powell and most other Fed policymakers have underscored that they are keeping rates on hold because of the uncertainty created by Trump's sweeping tariffs, including a 10% tax on all imports and a 145% levy on imports from China.

In remarks Wednesday in Chicago, Powell reiterated that the Fed was waiting for greater clarity before making any moves and said the tariffs would likely worsen inflation.

Powell has steadfastly maintained that the Fed is independent from politics, a stance that Fed chairs have stressed since at least the 1970s. Back then, the Fed was widely seen as worsening a 15-year run of high inflation by giving in to demands from President Richard Nixon to keep interest rates low in the run-up to the 1972 election.

Economic research has suggested an independent central bank is more likely to keep inflation in check because it is more willing to do unpopular things, such as lift interest rates, to fight rising prices. Wall Street investors also largely prefer an independent Fed, though the stock market did not appear to react to Trump's comments.

Powell said Wednesday that the Fed will base its decisions solely on what's best for all Americans.

“That’s the only thing we’re ever going to do,” Powell said. “We’re never going to be influenced by any political pressure.”

He also suggested that the central bank will focus on fighting inflation in the wake of the tariffs, which would likely mean they would keep rates elevated.

Trump complained that interest rates are still rising “because we have a Federal Reserve chairman that is playing politics.” Yet longer-term rates rose after Trump announced his trade penalties.

Trump and members of his economic team have said they would like longer-term interest rates to fall, which would make it cheaper for Americans to borrow to buy homes, cars and appliances. Yet the Fed controls a short-term rate and can only indirectly affect longer-term borrowing costs.

A case before the Supreme Court could make it easier for a president to fire top officials, such as the Fed chair, at independent agencies. At issue are two Trump firings, which the justice have let stand while they consider the case.

Powell said he is watching the case closely but that it might not apply to the Fed, given that the court has in the past carved out exemptions for the central bank. Lawyers for the Trump administration, seeking to narrow the focus of the case, have also argued that it does not involve the Fed.

In a 2024 campaign interview with Bloomberg News, Trump said he would allow Powell to serve out his term as chair. Earlier this month, Trump's top economic adviser, Kevin Hassett, said in a television interview that “there's not going to be any political coercion over the Fed, for sure.”

Powell started Trump’s second term in a relatively secure spot with a low unemployment rate and inflation progressing closer to the Fed’s 2% target, conditions that could have spared him from the president’s criticism.

But Trump’s tariffs have increased the threat of a recession with higher inflationary pressures and slower growth, a tough spot for Powell, whose mandate is to stabilize prices and maximize employment. With the economy weakening because of Trump’s moves, the president appears to be looking to pin the blame on Powell.

On April 2, Trump rolled out increased tariff hikes based off U.S. trade deficits with other nations, causing a financial market backlash that almost immediately led him to announce a 90-day pause.

Wall Street banks such as Goldman Sachs have raised their odds that a recession could start. Consumers are increasingly pessimistic in surveys about their job prospects and fearful that inflation will shoot up as the cost of the import taxes get passed along to them.

The Budget Lab at Yale University estimated that the increased inflationary pressures from the tariffs would be equal to the loss of $4,900 in an average U.S. household.

Associated Press journalist Sagar Meghani contributed to this report.

President Donald Trump speaks as he meets with Italy's Prime Minister Giorgia Meloni in the Oval Office of the White House, Thursday, April 17, 2025, in Washington. (AP Photo/Alex Brandon)

President Donald Trump listens as he meets with Italy's Prime Minister Giorgia Meloni in the Oval Office of the White House, Thursday, April 17, 2025, in Washington. (AP Photo/Alex Brandon)

President Donald Trump speaks as he meets with Italy's Prime Minister Giorgia Meloni in the Oval Office of the White House, Thursday, April 17, 2025, in Washington. (AP Photo/Alex Brandon)

President Donald Trump listens as he meets with Italy's Prime Minister Giorgia Meloni in the Oval Office of the White House, Thursday, April 17, 2025, in Washington. (AP Photo/Alex Brandon)

FILE - President Donald Trump speaks to reporters as he signs executive orders in the White House, Feb. 4, 2025, in Washington. (AP Photo/Evan Vucci, File)

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

Chair of the Board of Governors of the Federal Reserve System Jerome Powell speaks during an event hosted by the Economic Club of Chicago, Wednesday, April 16, 2025, in Chicago. (AP Photo/Erin Hooley)

AMMAN, Jordan (AP) — A long and engrossing qualifying journey of 16 games, while dealing with the obstacles of a war, came crashing down in an instant for Oday Dabbagh and his Palestinian team.

Their legacy will long continue.

Players left the field in tears in the immediate aftermath at the King Abdullah II Stadium in Amman, Jordan, last Thursday after their quest for a first appearance at a World Cup evaporated on a contentious penalty awarded deep in extra time. Fans looked on, stunned.

“It's very hard,” Dabbagh, the team's star striker, told The Associated Press. “It was massive for us to get to the next stage — we prepared well, we had a positive atmosphere, and we had the fans with us. We gave everything, but it was gone in a moment.”

Needing to win its last three Group B games to reach the playoffs for the last two of Asia's automatic spots at the World Cup, the No. 101-ranked team in the world beat Iraq in Basra in March, Kuwait in Kuwait City on June 5. Five days later, it was leading 1-0 against Oman in Jordan in the 97th minute.

The Palestinians had never been in a better position in qualifying for a World Cup. Then Oman was awarded, and scored, a penalty to make it 1-1 in the last real act of the game.

Not long after the dejected players had picked themselves up, the Palestine Football Association (PFA) made an official complaint to soccer's world governing body, FIFA, about the penalty. It didn't change the fact, however, that the long road trip was over.

“We tried to put smiles on the faces of Palestinians amid their great pain,” head coach Ihab Abujazar said. “The heroic players are our pride and glory, a symbol of all that is beautiful in the Palestinian nation.”

It may have been different if the Palestinian team, admitted into FIFA in 1998, was able to play home games in front of its fans in Gaza or the West Bank in the third round of qualifying. The Israel-Hamas war meant that couldn't happen. And so the many of the team's home games have been taking place in the nearby Jordanian capital of Amman, home to a large community of Palestinians.

“It is easier to play in your home,” Dabbagh, who helped Aberdeen win the Scottish Cup last month, said. “But the circumstances there are so difficult so we choose to play in Amman as it is close to Palestine, the people are the same, and we have a lot of fans there."

There's been no domestic soccer in the Palestinian territories since the war started in 2023. Hundreds of athletes are among the more than 55,000 Palestinians killed in the conflict and sports facilities have been destroyed.

“Everything that goes on makes us all sad,” Dabbagh said. “As players, we try to focus on football during the games, but we use what is happening as motivation to bring happiness to the people of Palestine.”

All but two of the roster of 27 national squad players are contracted to foreign clubs either in the region or in Europe, a change from the start of the conflict when a number of players weren't able to leave the West Bank or Gaza to report for international duty.

Over the past year or so, the Palestinian squad has assembled for training camps in Algeria, Qatar and Saudi Arabia to prepare for World Cup qualifying.

The top two teams in each of three Asian groups in the third round earned direct spots for next year's World Cup in the United States, Canada and Mexico. The third- and fourth-place teams in each group advanced to a playoff for two more places. A win would have secured fourth spot in the group for the Palestinians. The last-minute draw meant they finished a point behind Oman in fifth.

Now their focus has to shift to the 2027 Asian Cup, which will take place in Saudi Arabia. The Palestinian team has already qualified for the tournament.

Dabbagh is ready to show that the team is set to remain a force in Asian soccer and continue to be ambassodors for millions of people.

“We will keep using football as a message to show the world that there are other things in Palestine” he said. “We will keep going. The dream is not over, it is just delayed.”

AP soccer: https://apnews.com/hub/soccer

Palestinian fans watch an Asian Group B World Cup qualifying soccer match between Paelstinians and Oman at the King Abdullah II Stadium in Amman, Jordan on June 12, 2025.(AP Photo/John Duerden)

Palestinian players leave the field after an Asian Group B World Cup qualifying soccer match against Oman at the King Abdullah II Stadium in Amman, Jordan on June 12, 2025. (AP Photo/John Duerden)