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President Trump’s ramped-up attacks on Federal Reserve Chair Jerome Powell have Washington Republicans bracing for a confrontation that could make the turmoil in the financial markets much worse and put the Fed’s independence and credibility in jeopardy.
Republican aides and strategists say GOP lawmakers are highly anxious about Trump’s tariff strategy and fear that he will send more waves through the financial markets by threatening to interfere in the central bank’s domain of setting monetary policy.
The stock markets sold off sharply, and volatility spiked up Monday after Trump blasted Powell, whom he appointed as Fed chair in 2018, as a “major loser” and demanded he cut interest rates “NOW.”
A senior GOP aide said Republican senators “care a heck of a lot” about the Fed’s independence and predicted that GOP lawmakers will step in to defend Powell next week when they return to Washington from a two-week recess.