Can Trump Fire Powell? Tensions Flare as Trump Demands Fed Chair’s Resignation

In a dramatic escalation of long-simmering tensions between the executive branch and the U.S. central bank, former President Donald Trump has called for the resignation of Federal Reserve Chair Jerome Powell, sparking renewed debate over the limits of presidential power and the independence of the Federal Reserve.

Speaking at a campaign rally and later in a series of posts on Truth Social, Trump criticized Powell’s leadership of the Federal Reserve, calling its recent economic reports a “complete disaster” and accusing Powell of dragging his feet on interest rate cuts.

Trump pointed to the recent move by the European Central Bank to slash rates to 2.25% as evidence that the Fed was “asleep at the wheel,” ignoring falling oil and food prices and the growing need to stimulate the U.S. economy.

“Other central banks are acting decisively. Powell is failing the American people,” Trump declared. “He needs to resign – now.”

Powell Pushes Back

Jerome Powell, who was originally appointed by Trump in 2018 and reappointed by President Biden in 2022, did not take the criticism lightly.

During a press briefing this week, Powell firmly rejected the calls for his resignation and reaffirmed the Federal Reserve’s independence.

“Our decisions are guided by economic data, not political pressure,” Powell said. “The Fed will act when inflation and broader indicators justify it. Rate decisions are complex, and premature moves can cause more harm than good.”

Powell also addressed the inflationary risks tied to Trump’s proposed tariff expansions, noting that “rising trade barriers could put upward pressure on prices,” further complicating the Fed’s decision-making process.

Can a President Fire the Fed Chair?

Trump’s demand reignited the question: Can a U.S. president fire the Federal Reserve chair?

According to the Federal Reserve Act, a Fed governor (including the chair) can only be removed “for cause.” Legal scholars generally interpret this to mean misconduct or incapacity—not policy disagreements.

While no sitting president has ever successfully fired a Fed chair, the debate continues to stir whenever tensions rise between the White House and the central bank.

“Powell can only be dismissed for cause, not because he won’t cut rates fast enough,” said Sarah Brennan, a monetary policy expert at the Brookings Institution. “Any attempt to remove him over policy would be met with serious legal and constitutional challenges.”

Political Theater or Real Threat?

Trump’s remarks may be more of a strategic political move than a real effort to unseat Powell. With the 2024 election cycle heating up, Trump has sought to paint the current economic climate as the result of poor decisions made by central bankers and political opponents alike.

Still, the public clash has unsettled some market watchers. “This kind of rhetoric can undermine investor confidence in the Fed’s independence,” said Anthony Delgado, chief economist at Sterling Insights. “It risks politicizing monetary policy at a time when stability is essential.”

As the drama unfolds, Powell appears poised to stay the course, leaning on data-driven analysis and the Fed’s long-standing principle of autonomy.

Whether Trump’s pressure campaign gains traction remains to be seen, but one thing is certain: the battle between politics and policy at the highest levels of American finance is far from over.

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