This week, President Donald Trump’s long-running anger with Jerome Powell reached a fever pitch. The president publicly considered firing Powell over his interest-rate choices, even though several aides have advised moderation.
According to those familiar with the situation, Trump has been asking persons close to him whether he might fire the head of the Federal Reserve. Additionally, Powell’s statement on Wednesday defending the Fed’s cautious rate policy while the president’s trade war unsettles markets infuriated some Trump supporters, according to reports.
Even though Trump hasn’t explicitly said that he would fire the central banker, it has long been known that he is thinking about firing a public servant when he inquires about their employment status. However, opposing a Fed chair would have much more global economic implications than Trump’s other personnel choices, upending an economy already shook by the US president’s decision to increase tariffs to their highest levels in a century.
Trump told reporters in the Oval Office on Thursday, “He’ll be out of there if I ask him to.” He doesn’t make me happy. I informed him.
Trump wants to increase seafood exports from the US fishing industry.
On April 17, Donald Trump was in the Oval Office. Photographer: Bloomberg/CNP/Chris Kleponis
According to a previous Wall Street Journal article, Trump spoke about firing Powell.
According to those familiar with the situation, Treasury Secretary Scott Bessent and White House National Economic Council Director Kevin Hassett have opposed the concept of firing Powell before his tenure expires in May 2026, citing the possible economic consequences.
Powell said that the Fed must make sure tariffs don’t lead to a longer-lasting increase in inflation during a speech at the Economic Club of Chicago on Wednesday. Powell also said the Fed will “wait for greater clarity before considering any adjustments to our policy stance.”
For the time being, such comments dashed expectations that the Fed would intervene with a rate drop to assist stop the stock market from plunging for weeks as a result of Trump’s tariff rollout.
Trump attacked Powell, whom he picked to head the Fed in his first term, at the White House on Thursday. Trump said that he had been “too slow” to lower interest rates and had been a “dreadful” Fed head.
“He’s going to have a lot of political pressure,” Trump said. They are also political, as you are aware, and I believe that he is under a lot of political pressure to cut interest rates.
Trump likened the Fed to the European Central Bank, which on Thursday cut its benchmark rate by a quarter point to 2.25%, just as he did during his first term.
See also: Is Powell Fireable by Trump? The President’s Power to Influence the Fed
In addition, Trump maintained that although though the Fed is an independent organization, he still has the authority to fire Powell if he so chooses. In recent months, the administration fired senior officials at the Federal Trade Commission, the National Labor Relations Board, and the Merit Systems Protection Board, raising questions about his capacity to fire top executives in somewhat independent organizations.
When asked whether he would take action to terminate Powell, the president remained silent. The Trump said on social media on Thursday that “Powell’s termination cannot come fast enough!” Regarding Trump’s comments, a Fed spokesperson chose not to respond.
Powell finds himself in the unfortunate position of negotiating turbulent economic seas that have been substantially agitated by Trump, who had previously lost faith in him.
The majority of analysts predict that growth and employment would be weakened by the wave of additional tariffs imposed on the US’s international trade partners. However, they will also probably encourage price increases at a time when the Fed’s 2% inflation objective has not yet been reached.
Powell and his colleagues will then have to make the tough choice of whether to maintain high interest rates to restrain price pressures or cut them to support the economy in the next months.
Powell restated his claims that “our independence is a matter of law” and that the Fed’s statute demonstrates that there is “not removal except for cause” in his address in Chicago.
Outside the White House, there were also warnings about the effect Powell’s removal might have on markets.
On Bloomberg Television, Citigroup Inc.’s global chief economist Nathan Sheets issued a dire warning about what would occur “if we now cross the Rubicon on central bank independence.” “We start seriously and permanently undermining confidence in the economy and the markets,” he said, predicting a protracted slump.
“The president has free speech just like everyone else, but he does not have the power to fire Jerome Powell,” said Democratic US Senator Elizabeth Warren in an interview on Thursday. He will also cause a market meltdown if he tries.
In order to draw in capital, Warren said, “even dictatorships attempt to establish a central bank that is separate from the national president.”