Elizabeth Warren said on Wednesday that Trump plans to remove Federal Reserve Chair Jerome Powell from his post, calling it part of a purge that could rattle financial markets and blow up the idea of independent oversight in government.
In an interview with Bloomberg Television, Elizabeth, who represents Massachusetts in the Senate, said, “Nobody is safe, not even the chairman of the Federal Reserve,” and warned that Trump’s interpretation of executive power means “all the power belongs to the king.”
Elizabeth made the statement in Washington, D.C., just hours after Powell met with Treasury and Fed officials on the inflation trajectory. She accused Trump of overstepping legal limits to fire officials from independent agencies, including the Consumer Financial Protection Bureau, which Elizabeth helped set up after the 2008 crash. “If he can just mow through every civil servant,” she said, “it’s a form of lawlessness.” She believes the president’s actions violate federal law.
Warren hits Powell’s record and calls out Musk’s mass firings
Elizabeth reminded Bloomberg that she had opposed Powell’s reappointment by former president Joe Biden, pointing to Powell’s support for loosening financial rules.
She accused Powell of siding with Wall Street interests and warned that deregulating the banking sector would eventually hurt everyday people. Still, she said she supported the Fed’s independence and that of agencies like the Federal Trade Commission and Inspectors General, who have all been targeted under Trump’s return to power.
During the same interview, Elizabeth called out Trump and Elon Musk for firing massive numbers of federal workers and terminating government contracts.
She called it “lawlessness” and said it could destabilize the system designed to protect both markets and workers. She added that cutting rules that protect investors would wreck confidence in U.S. markets, saying, “The reason our stock market is so valuable is in part because it has level, transparent rules that are strictly enforced.”
She also targeted Paul Atkins, who Trump wants to install as the new chairman of the Securities and Exchange Commission. Elizabeth blamed Paul for voting in favor of weaker regulations before the financial crash of 2008 and said he hadn’t learned anything since then. “He had the chance to have 20-20 hindsight,” she said. “He has 20-zero hindsight.”
Elizabeth, one of the Senate’s most outspoken progressives, also took aim at Senate Majority Leader Chuck Schumer for backing down on a procedural move that could have blocked a Republican spending bill earlier this month. That bill kept the government open, but many Democrats wanted to use the moment to push back against Musk’s federal firings. Elizabeth said:
“I think there’s a moment when you stand and fight. We cannot avoid this fight, because Donald Trump and Elon Musk, truly they want to take this country over for just a handful of people and they want even more wealth and power to go to them while everybody else has to pay for it.”
Bostic cuts forecast as tariffs drag inflation outlook
While the political fights played out in Washington, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, appeared on Monday in a Bloomberg interview and lowered his rate-cut forecast.
Earlier this year, Raphael had expected two rate cuts in 2025. Now he’s predicting just one, citing Trump’s tariffs as the key reason.
“I moved to one mainly because I think we’re going to see inflation be very bumpy and not move dramatically and in a clear way to the 2% target,” he said.
Raphael now expects inflation to settle around the Fed’s 2% target sometime in early 2027, which is even later than the Fed’s own projection in September 2024, when officials thought 2026 was more realistic. This adjustment aligns with the Fed’s most recent forecast, issued last week.
Despite Raphael’s cautious tone, the Fed still says it sees a half-point rate cut coming this year, which would mean two reductions of 25 basis points. But that number is just the median. A closer look shows that more officials now expect either one cut or none at all next year.
Trump demands immediate rate cuts as Powell hesitates
Trump, meanwhile, wants rate cuts now. During a Cabinet meeting at the White House this week, he said, “Generally, prices are coming down, and energy prices are coming down, and I hope the Fed lowers interest rates, and then you get to see interest rates coming down.” Last week, he also posted online that the Fed should start slashing now before his new tariffs kick in on April 2.
Those tariffs are already affecting the Fed’s inflation models, according to Jerome Powell, who acknowledged that rising trade costs are being considered in their economic forecasts. But the Fed isn’t moving just yet. Officials are still waiting for more data, even though investors are growing restless.
The Fed’s latest inflation report showed slower price increases for both consumer and producer goods in February, but deeper numbers suggest the central bank’s 2% inflation goal could be delayed. The biggest problem is Trump’s trade policy, which throws uncertainty into every model Powell’s team is working with.
Rick Rieder, Chief Investment Officer for Global Fixed Income at BlackRock, said on Wednesday, “Uncertainty was a highlight of the statement.” He explained that both the market and the Fed are stuck in limbo and need time to figure out what to do next.
Powell told reporters that the Fed has to stick with earlier projections for now, saying, “There is a level of inertia” until more clarity emerges. But time might be running out, especially if Trump’s tariff policies escalate through the summer.
There’s also concern that the Fed might cut rates for the wrong reason — not because inflation is easing, but because growth is slowing and the job market is weakening. That would signal weakness, not strength, and investors may not like what comes next.
Ken Mahoney, CEO of Mahoney Asset Management, told Yahoo Finance on Thursday:
“Everybody wants two cuts, three cuts, four cuts. You don’t want any cuts. You want earnings growth. You want a strong economy. Be careful what you wish for.”
Even though Powell has held a more hawkish line, markets still priced in three rate cuts by the end of this year, up from two. That shift was reported by Bloomberg, based on traders reacting to the latest projections. But Ross Mayfield, investment strategist at Baird, warned that none of it might play out as expected.
He said the Fed’s forecast models — especially the dot plot — haven’t exactly nailed it over the last five years. “The ‘dot plot’ and [the Fed’s] projections have not been super reliable over the last five years,” he said. He pointed to political chaos and economic confusion as reasons not to trust the numbers.
“When the path forward is so unclear,” Ross said, “you just take it with a grain of salt, go back to basics, and focus on the drivers of either the individual equities or the sectors in the market that you own. In this case, thinking about things like earnings and long rates, rather than what the Fed is doing at the short end of the curve.”
