U.S. President Donald Trump has stated it is “highly unlikely” he will fire Federal Reserve Chair Jerome Powell, despite renewed discussions about the possibility. Speaking at the White House, Trump acknowledged floating the idea with Republican lawmakers but said he wasn’t planning to act unless Powell committed fraud. Trump has long criticized Powell, calling him a “knucklehead” and blaming him for not lowering interest rates fast enough. He also supported claims from allies that Powell mismanaged a $2 billion Fed building renovation—potentially laying the groundwork for dismissal under the legal clause “for cause,” which typically refers to serious misconduct.
Despite these attacks, Powell has maintained he intends to complete his term, which ends in May 2026, and serve as a Fed governor until 2028. The Federal Reserve, established by Congress, operates independently from the White House and has pushed back on allegations related to the renovation. Trump’s renewed focus on Powell comes as the U.S. economy slows under inflationary pressure and lingering trade war impacts. The Fed’s interest rate, currently around 4.3%, hasn’t been cut as quickly as in Europe or the UK, a point of frustration for Trump, who wants lower rates to boost growth.
Analysts warn that interfering with the Fed’s independence could undermine economic stability and investor confidence. JP Morgan CEO Jamie Dimon stressed that politicizing the Fed can have harmful, unintended consequences. Treasury Secretary Scott Bessent confirmed a formal search for a possible replacement is underway, with potential candidates including Bessent himself, Kevin Hassett, and Kevin Warsh. Powell was originally appointed by Trump in 2017 and reappointed by President Biden in 2021.
