Trump raises Powell firing as ire toward US Fed chair explodes

Powell angered some Trump allies by giving a speech Wednesday justifying the Fed’s cautious rates approach as the president’s trade war unnerves markets, people said. Bloomberg

President Donald Trump’s long-running ire with Jerome Powell reached a fever pitch this week, with the president openly musing about dismissing the Fed chair over his interest-rate decisions as some advisers have been counseling restraint.

Trump has been asking those around him about the possibility of removing the Federal Reserve chair, according to people familiar with the matter. Moreover, Powell angered some Trump allies by giving a speech Wednesday justifying the Fed’s cautious rates approach as the president’s trade war unnerves markets, people said.

While Trump hasn’t outright said he will oust the central banker, merely asking about someone’s job status has traditionally been a tell-tale sign he is considering sacking a government official. But moving against a Fed chair would be far more significant for the world economy than Trump’s past personnel changes, sending shock waves through an economic system already rattled by the US president’s decision to raise tariffs to their highest levels in a century.

“If I ask him to, he’ll be out of there,” Trump told reporters in the Oval Office Thursday. “I’m not happy with him. I let him know it.”

The Wall Street Journal earlier reported that Trump discussed firing Powell.

Inside the administration, Treasury Secretary Scott Bessent and White House National Economic Council Director Kevin Hassett have pushed back against the idea of axing Powell before his term ends in May 2026, warning about the potential economic fallout, people familiar with the matter said.

Powell said in a speech at the Economic Club of Chicago Wednesday that the Fed must ensure tariffs don’t trigger a more persistent rise in inflation, and indicated the central bank would “wait for greater clarity before considering any adjustments to our policy stance.”

Those remarks squelched hopes for now that the Fed would jump in with a rate cut that could help stem a weeks-long stock market rout triggered by Trump’s tariff rollout.

At the White House Thursday, Trump unleashed on Powell, whom he nominated to lead the Fed during his first term. Trump said he had been a “terrible” Fed chair who had been “too slow” to cut rates.

Trump also declared: “He’s going to have a lot of political pressure. You know they are political also, and I think there’s a lot of political pressure for him to lower interest rates.”

As he did during his first term, Trump compared the Fed with the European Central Bank, which on Thursday lowered its benchmark rate by a quarter point to 2.25%.

Trump also insisted he has the power to oust Powell if he wanted to, despite the Fed’s status as an independent agency. His ability to remove top officials at agencies that have some independence has come under scrutiny in recent months, as the administration dismissed senior officials at the Federal Trade Commission, the National Labor Relations Board and Merit Systems Protection Board.

The president did not directly address questions about if he would move to fire Powell. Earlier Thursday, the president posted on social media that “Powell’s termination cannot come fast enough!” A Fed spokesman declined to comment on Trump’s remarks.

Powell is stuck in the unenviable position of navigating stormy economic waters largely stirred up by Trump, who had already soured on him.

Most economists expect the wave of new tariffs against the US’s global trading partners will weaken growth and employment. But they will also likely spur price hikes at a time when inflation still has not settled to the Fed’s 2% target.

That will put Powell and his colleagues in the difficult position of deciding whether to lower interest rates to cushion the economy over the coming months, or keep rates elevated to contain price pressures.

In his Chicago speech, Powell reiterated his argument that “our independence is a matter of law,” and that the Fed’s statute shows that there’s “not removal except for cause.”

Warnings also came from outside the White House about the impact firing Powell would have on markets.

Nathan Sheets, global chief economist at Citigroup Inc., warned on Bloomberg Television about what would happen “if we now cross the Rubicon on central bank independence.” He predicted a longer downturn, saying the risk is “we start seriously and permanently undermining confidence in the economy and the markets.”

Democratic US Senator Elizabeth Warren said in a Thursday interview that “the president has free speech just like everyone else, but he does not have the power to fire Jerome Powell. And if he tries, he will crash the markets.”

“Even countries with dictators try to create a central bank that is independent of the president of the country in order to attract capital,” Warren said.