President Donald Trump is likely to fire Federal Reserve Chair Jerome Powell soon, a White House official said, and discussed the possible move in a meeting with congressional Republicans on Tuesday night.
While the lawmakers voiced support for the move, which would likely roil financial markets and lead to a consequential legal showdown, Trump has not made a final decision and could change his mind, according to the official who requested anonymity to discuss a private conversation.
The president has repeatedly expressed frustration over the central bank’s decision to hold interest rates steady, and administration officials have confirmed in recent days that the process to select a successor to Powell — whose term as chair isn’t set to expire until May 2026 — is underway.
Trump made the comments in a meeting with GOP lawmakers who voted against cryptocurrency legislation earlier Tuesday. The remarks were first reported by CBS News.
Anna Paulina Luna, a Florida Republican who was among the holdouts on the cryptocurrency bill, wrote on social media that she was “Hearing Jerome Powell is getting fired! From a very serious source.”
In a later post, she wrote, “I’m 99% sure firing is imminent.”
In seeking to fire him, Trump would test the legal bounds of his authority over the central bank and independent federal agencies more broadly. In recent days, Trump has lambasted Powell over renovations at the central bank that the president and his allies have seized on, arguing that the work has been plagued by cost overruns and is exorbitantly lavish for a government office building. Trump suggested that the renovation costs were “pretty disgraceful.”
Asked if it was a fireable offense by reporters on Tuesday, Trump responded “I think it sort of is,” but stopped short of saying he planned to push out the Fed chief over the flap.
“I think he’s a total stiff, but the one thing I didn’t see him as is the guy that needed a palace to live in,” Trump said.
Powell has called media reports about the renovations inaccurate. Earlier this week made a formal request for the bank’s inspector general to review the renovation.
Powell has also maintained that a president has no legal authority to fire or demote those in leadership positions at the Fed. In April he said, “We’re not removable except for cause.”
That was a reference to Section 10 of the Federal Reserve Act, the law that governs the central bank, which says members of the Fed’s Board of Governors, of which the chair is one, can be “removed for cause.”
“If Trump fires Powell and puts someone in place to bully the Fed into cutting rates, the bond market would react poorly to that — it would sell off and yields would go up,” said Jim Bianco, president and macro strategist at Bianco Research. “We’ve already seen an example” of what might happen, he said, pointing to the jump in 10-year Treasury yields in late 2024 that came alongside Fed rate cuts.
The market was “basically saying to the Fed you have the wrong policy — the economy doesn’t need extra stimulus. That’s what would happen now.”
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