DETROIT — President Donald Trump lashed out at the Federal Reserve on Tuesday — as his administration seeks to investigate the central bank’s chair — and called for lower interest rates during a speech touting his economic record a year into his second term.
Federal prosecutors served Federal Reserve Chair Jerome H. Powell with a subpoena last week seeking grand jury testimony about renovation of the institution’s Washington headquarters. There’s no indication of impropriety surrounding the construction project; the president has long feuded with Powell, whom Trump appointed in his first term, over interest rates.
In a speech to the Detroit Economic Club, Trump boasted that the U.S. economy had boomed since he took office, saying the stock market is up, prices are down and economic growth is doing well. He vowed to bring down health care costs. And he spotlighted the tariffs that he said were pulling cash into government coffers and boosting U.S. manufacturing — although the Supreme Court is poised to rule on their legality, with their fate uncertain.
Though Trump has denied any connection to the Justice Department’s investigation of Powell, he made clear his contempt for the central bank head and his eagerness to be rid of him.
“No matter who’s president, you have a good quarter, and they want to kill it because they’re so petrified of inflation,” Trump said, later adding, “if I had the help of the Fed, it would be easier — but that jerk will be gone soon.”
Trump’s economy is sending mixed signals. His worldwide tariffs have disrupted global markets, but have yet to significantly raise domestic inflation. Prices in December remained elevated over the same period a year ago, but were stable. One market analyst in a research note Tuesday called inflation the “pot [that] won’t boil.”
Still, Powell said in December that the excess inflation in the economy was solely due to Trump’s trade war. And the president threatened to impose new duties Monday evening, announcing a 25 percent import tax on products made by countries doing business with Iran.
Trump, though, may not have the authority to set those tariffs — and his administration has yet to roll out formal guidance implementing them. The Supreme Court is set to rule as soon as Wednesday on Trump’s ability to leverage emergency economic powers to set and reset tariff rates; the justices appeared skeptical of Trump’s moves during oral arguments in November.
A ruling against Trump’s tariffs could force the Treasury to repay roughly $140 billion plus interest to importers that bore the cost of the taxes. Trump has based much of his second-term agenda — both on economic and foreign policy — on his absolute ability to set tariff rates. He has credited trade policy as the lever through which he “solved” multiple armed conflicts. He convinced hard-line GOP lawmakers to consider tariff revenue as an offset for major tax cuts and new spending as part of his new tax and immigration law.
Before his remarks, Trump toured Ford Motor Company’s historic River Rouge manufacturing facility. The plant produces F-150s, long the U.S.’s best-selling truck and vehicle overall.
The company, which employs close to 50,000 people in Michigan, attempted to counter the economic effects of the tariffs by launching universal employee pricing in the spring, but in the summer reported it lost money in the quarter and expected to pay $2 billion in tariff costs on the year.
Trump carried Michigan, a crucial swing state, in the 2024 election largely by emphasizing a populist economic message with a pledge to reduce consumer costs on “Day One.” But 51 weeks into his second term, Michiganders have turned on the president’s economic message: 48 percent of state residents said that Trump’s policies have made the economy “weaker,” according to new polling released Tuesday by local television station WDIV and the Detroit News. Thirty-eight percent of Michiganders said Trump’s agenda had made the economy “stronger,” but 64 percent reported paying more for everyday consumer goods.
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