President Trump’s intensified criticism of Federal Reserve Chair Jerome Powell has alarmed Washington Republicans, who fear it could destabilize financial markets and jeopardize the Fed’s independence. GOP lawmakers are increasingly anxious about Trump’s tariff strategy and his threats to interfere with the central bank’s monetary policy. Following Trump’s recent attack labeling Powell a ‘major loser’ and demanding immediate interest rate cuts, stock markets plummeted, and volatility surged. A senior GOP aide emphasized that Republican senators value the Fed’s independence and may intervene to defend Powell upon returning from recess. Traditional Republicans are particularly uneasy about the president’s pressure on the Fed, warning that firing Powell could lead to catastrophic market reactions. Experts caution that political interference in monetary policy undermines the Fed’s credibility, making policy implementation more costly and potentially driving up interest rates. Market analysts and economists agree that preserving the Fed’s autonomy is crucial for economic stability amid Trump’s unpredictable trade policies.
— new from The Hill
