Trump says Fed can raise rates if inflation returns, but warns Powell will be “too late for that too”

Trump said Thursday that if inflation picks up next year, he would support the Fed’s decision to increase interest rates. Still, the US President added that Fed Chair Jerome Powell would still be slow to act, just as he believes Powell is currently dragging his feet on rate cuts.

“Let’s say there was inflation. In a year from now, raise your rates. I don’t mind, raise your rates. I’m all for it. I’ll be the one to be calling you,” Trump said at a White House event today, as first reported by Bloomberg. “He’ll be too late for that too.”

Trump clarified that he had no plans to remove the Fed chair, softening his remarks from last week that he would soon nominate someone new to lead the central bank.

His comments have revived succession chatter at the Fed, with Treasury Secretary Scott Bessent emerging earlier this week as a name of interest among Trump advisers.

Bessent has not confirmed nor denied any intention to pursue the role, while the White House has dismissed the report.

Trump also criticized Powell’s approach to monetary policy amid signs of easing inflation, saying the Fed has been too slow to reduce interest rates. He expressed frustration about how current rates are affecting government borrowing costs.

Despite Trump’s continued pressure, the Fed is widely expected to keep interest rates on hold at the upcoming FOMC meeting, CME FedWatch data has indicated.

The CPI report for May, published on Wednesday, showed a marginally softer reading than expected. However, year-over-year inflation ticked up to 2.4% from 2.3% in April, still exceeding the central bank’s 2% target.