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The boss of JP Morgan Chase, Jamie Dimon, has defended the “absolutely critical” independence of the Federal Reserve chair, as Donald Trump continues to demand immediate cuts in interest rates.
The US treasury secretary, Scott Bessent, said on Tuesday that a formal process for choosing a successor to the Fed chair, Jerome Powell, had already begun – despite the fact that his term does not end until next May.
Trump has repeatedly criticised Powell, calling him “very dumb” and a “major loser”, and urging him to slash interest rates. The president posted a handwritten note to Powell on social media last week, saying: “You have cost the USA a fortune and continue to do so. You should lower the rate – by a lot!”
Powell has said in turn that rate cuts have been delayed by Trump’s tariff policies, which many policymakers fear will boost inflation. Data for June, published on Tuesday, showed the annual rate of inflation rising to 2.7%, from 2.4% a month earlier.
Speaking to reporters as JP Morgan reported its quarterly earnings on Tuesday, Dimon cautioned against interfering with the workings of the US central bank.
“The independence of the Fed is absolutely critical – and not just for the current Fed chair, whom I respect, Jay Powell, but for the next Fed chair,” he said. “Playing around with the Fed can often have adverse consequences, the absolute opposite of what you might be hoping for.”
Dimon’s remarks came as Bessent told Bloomberg TV that the White House would press ahead with choosing a replacement for Powell. “There are a lot of great candidates. And we’ll see how rapidly it progresses. It’s President Trump’s decision and it will move at his speed,” he said.
Powell was given a round of applause by fellow central bankers at a European Central Bank conference earlier this month in Sintra, Portugal, when he was asked about the president’s attacks.
White House insiders have sent conflicting signals about Powell’s future. Bessent suggested Trump would not sack the Fed chair.
“President Trump’s said numerous times he is not going to fire Jay Powell,” the treasury secretary said, adding: “I think an independent central bank is very important for the conduct of monetary policy.”
But Kevin Hassett, director of Trump’s national economic council, said over the weekend that removing Powell was “being looked into”. Hassett is regarded as a potential contender for the role himself.
Fed independence is seen as crucial to maintaining investors’ confidence, with policymakers deemed more likely to be able to bring inflation under control without political interference.
Trump’s earlier attacks on Powell were seen as one factor behind the bond market selloff on Wall Street in April that led to the 90-day “pause” on tariffs – a deadline that has since been extended from 9 July to 1 August.
