US President Donald Trump plans to fire Fed Chair Jerome Powell soon, according to a senior White House official.
It was also learned that Trump brought up this possibility in his meeting with Republican members of Congress last night.
While the majority of lawmakers attending the meeting supported this move, the official noted that Trump hasn’t made a final decision yet and could change his mind. Trump, who has long been critical of Powell over the Fed’s decision to keep interest rates steady, has reportedly launched a search for a replacement. Powell’s term would normally run until May 2026.
This development, first reported by CBS News, came to the fore during a meeting with Republican lawmakers opposed to the cryptocurrency bill. Florida Representative Anna Paulina Luna posted on social media, “I’m hearing from a very serious source that Jerome Powell will be fired!” In a follow-up message, she added, “I’m 99% certain impeachment is imminent.”
Trump also harshly criticized the rapidly escalating renovations at the Fed’s Washington headquarters. He told reporters, “This is a disgrace. This is a government building, not a palace.” He continued his criticism of Powell, saying, “She’s a complete soulless person, but I didn’t know she was so eager to live in luxury.”
Powell, for her part, stated that media reports about the amendment were “inaccurate” and requested an investigation by the Fed’s inspector general earlier this week. She also cited the Fed Act in a statement in April, saying, “The president does not have the authority to remove the Fed chair. Legally, we can only remove them for serious cause.”
However, Trump’s dismissal of Powell would not only trigger sharp market volatility but also rekindle debate about the limits of presidential power over independent institutions in the US. According to Jim Bianco, President of Bianco Research, such a development could trigger a sell-off in the bond market and a sharp rise in interest rates. “The yield surge that followed the interest rate cuts at the end of last year is an example of how markets react to the wrong message,” Bianco said. “The same thing could happen again.”
*This is not investment advice.