If President Trump needed more proof that Federal Reserve Chair Jerome Powell is a roadblock to his economic nationalist agenda, Powell provided that proof this week. On Wednesday, for the fifth straight time since Trump took office, Powell announced that he would keep interest rates unchanged, maintaining the benchmark rate within the existing target range of 4.25 to 4.5 percent.

In light of the political and economic lead-up to the announcement, Powell’s decision to hold rates steady can only be seen as a bold statement of political and policy defiance on behalf of the nation’s economic establishment aimed at Donald J. Trump.

With the latest measures of economic growth surging and inflation plunging, the traditional measures would strongly indicate the need for a Fed rate cut. GDP exceeded expectations in the second quarter of 2025, coming in at a robust 3.0 percent, while inflation plunged to 1.67% in the latest monthly reading. The Fed Chair’s insistence that his refusal to lower rates is justified by ongoing concerns about inflation, and particularly the inflationary ripple effect of Trump’s tariff policies, sounds more like ideological hostility to the president’s economic policies than it does a legitimate concern based on leading indicators. The assessment that Powell’s refusal to cut rates is motivated by purely political opposition to Trump’s America First economic policies was strengthened by the rare dissent expressed by two members of the Fed board in favor of a 25-basis-point cut, marking the first time in over three decades that two members have split from the majority decision.

Indeed, Powell’s reasoning for his intransigence is belied by his dramatic lowering of rates in 2024, while Biden was still president. Shortly before the election, with growth sputtering and signs of inflation already back on the rise, Powell cut rates by a full 50 basis points, pointing to concerns of a slowing labor market. This was widely, and rightly, perceived as an effort to juice the economy for Biden heading into the election. Powell proceeded with two more 25-basis-point reductions before the end of the year in November and December, even with growth slowing and inflation ticking up. Now, with precisely the opposite trends, he has dug in his heels on lowering rates, despite both unprecedented opposition from his own Fed board members and public criticism from President Trump. Incredibly, a nervous Powell explained away his decision to hold rates steady in the teeth of leading indicators as keeping “a bit of distance between direct political control of those decisions and the decision makers…if you were not to have that, there would be a great temptation to use interest rates to affect elections, for example.” The blatant hypocrisy of the statement must have galled Trump.

The criticisms from the White House only intensified when Powell stubbornly stuck to his guns and ignored Trump’s pointed—and entirely justified—public calls for him to change course. “Powell is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL to have the job of Fed Chair,” Trump posted to social media the day after the decision. “He is costing our Country TRILLIONS OF DOLLARS,” the president asserted in his scathing attack, before characterizing the ongoing renovations of the Fed’s D.C. headquarters as “one of the most incompetent, or corrupt, renovations of a building in the history of construction!” Reigniting speculation that he might remove Powell before his term expires next May, the president stated, “I don’t rule out anything, but it’s highly unlikely.” Informed insiders say that his reluctance to remove Powell early stems from the advice of GOP leaders and administration officials who argue that it would be an unnecessary policy and legal battle that would cost the president precious political capital.

The truth is, however, that Trump can’t afford to wait ten months while Powell continues to throw a monkey wrench into the Trump recovery on behalf of the economic establishment with artificially high rates adversely affecting ballooning interest payments on the federal debt and a housing market showing signs of stalling. Trump’s America First economic policies are already producing impressive results, with GDP rising, inflation falling, tariff revenue surging, and wages climbing. But, as the president clearly grasps, all that is being jeopardized by a highly politicized Fed chair determined to slow down the economy and damage the president because of ideological opposition to Trump’s trade and industrial agenda that is completely divorced from facts on the ground.

In fact, a bold move to fire Powell could prove to be both a political and policy masterstroke. Replacing him with a non-establishment pick, less rigidly opposed to Trump’s policies and more amenable to calling balls and strikes on interest rate decisions, would not only provide further juice to the recovery at low risk, but it would also very likely withstand legal challenges since the original Federal Reserve Act simply states that the Fed chief can be “removed for cause by the president” without further definition. As the Supreme Court continues to move in the direction of backing executive authority over personnel, it seems unlikely they would force a showdown on so weak a reed. Powell has repeatedly proven himself to be a blatantly partisan hack. And Trump’s base would be energized by a bold offensive against the Fed, arguably the least democratic institution in Washington, and rightly seen as the heart of the D.C. swamp.

The choice is clear: fire Powell, ensure the continued robust recovery through the midterms in 2026, and strengthen the Congressional majority—or risk it all.

Rob Wasinger is co-founder of The Ragnar Group. He was director of Senate relations for the Trump transition team in 2016 and the first White House liaison at the State Department during the Trump administration.