Trump Suggests Firing Fed Chair Jerome Powell: What It Means for U.S. Economy
In a bold political move that could shake the financial world, President Donald Trump has suggested firing Federal Reserve Chair Jerome Powell — a proposal that is generating legal debate and political backlash.
According to CBS News, Trump recently met with House Republicans and floated the idea of removing Powell. Several lawmakers reportedly supported the idea, and Trump later confirmed the conversation during a press briefing at the White House.
“I asked them, ‘What do you think?’ Almost all said I should [fire him],” Trump said. “But I’m more conservative than they are.”
Why Is Trump Targeting Jerome Powell?
Trump’s frustration with the Fed Chair isn’t new. In recent weeks, he’s publicly criticized Powell for keeping interest rates high and not cutting them quickly enough. Trump claims inflation is now under control and believes lower interest rates would accelerate economic growth and support American borrowers.
But Powell and the Fed have taken a cautious stance. While inflation has decreased from its 2022–2023 highs, it still remains above the Fed’s target of 2%. The central bank is wary of reducing rates too quickly, especially amid concerns about the inflationary impact of Trump’s tariff policies.
Trump has not minced words in his criticism, calling Powell a "total stiff" and even referring to him as “Mr. Too Late” for what Trump sees as delayed action on rate cuts.
Is Firing Powell Legal?
Here’s where things get complicated. Federal law states that the Chair of the Federal Reserve can only be removed “for cause.” Unlike Cabinet positions, the Fed Chair is protected to ensure the central bank remains independent of political influence.
Trump has reportedly been exploring legal avenues to justify a “for cause” firing, possibly connected to an ongoing investigation into cost overruns in the renovation of the Federal Reserve’s Washington headquarters — a project allegedly mismanaged under Powell’s watch.
“I think he’s got some problems,” Trump remarked. “He spent far more money than he was supposed to rebuilding.”
However, legal experts warn that removing Powell without clear justification would spark immediate legal challenges and could lead to instability in financial markets.
Reactions From Lawmakers and the Fed
Some Republican lawmakers have expressed confidence that Powell’s dismissal is imminent. Florida Rep. Anna Paulina Luna posted on social media, “Hearing Jerome Powell is getting fired! From a very serious source,” later adding she was “99% sure.”
On the other hand, some members of the House Financial Services Committee are reportedly planning to meet with Powell privately to reinforce the importance of the Fed's independence.
Meanwhile, the White House has not officially laid out a legal strategy or issued any formal statement regarding Powell’s future.
Market and Economic Impact
Removing the Fed Chair, especially under uncertain legal grounds, would be an unprecedented move that could spook markets. The Federal Reserve plays a crucial role in managing inflation, stabilizing the economy, and overseeing monetary policy. Undermining its independence may lead to investor uncertainty and increased market volatility.
Economists also warn that replacing Powell with someone more aligned with Trump’s agenda could risk overheating the economy or reigniting inflation.
What’s Next?
While Trump insists no final decision has been made, the political temperature is rising. Whether or not he follows through with firing Powell, the escalating rhetoric adds pressure on the Fed ahead of its next policy meeting.
With Powell’s term set to end in May 2026, all eyes will be on how this power struggle unfolds — and what it means for interest rates, inflation, and the broader U.S. economy.
Conclusion
Trump’s latest confrontation with Federal Reserve Chair Jerome Powell underscores a growing tension between political leadership and central bank independence. While the possibility of Powell’s dismissal remains uncertain, the legal, economic, and political implications are already being felt.
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