President Donald Trump on Wednesday suggested it is “highly unlikely” he will fire Federal Reserve Chair Jerome Powell, despite privately indicating otherwise just a day earlier. Trump told reporters in the Oval Office that while he doesn’t rule anything out, the only exception would be “unless he has to leave for fraud.”
Behind closed doors, Trump has pressed lawmakers about firing Powell, expressing dissatisfaction with the Fed chair’s handling of interest rates and pointing to a $2.5 billion Federal Reserve building renovation as a potential cause for dismissal. During a private meeting Tuesday, Trump reportedly said he intended to fire Powell—possibly as soon as Wednesday—and even gestured to a termination letter, according to sources familiar with the meeting.
Trump confirmed publicly that he asked lawmakers about the idea of firing Powell, noting most were supportive, but he denied plans for immediate dismissal. White House officials said the president is currently “toying with the idea.”
Market Concerns and Congressional Warnings
The prospect of firing Powell sparked market jitters, with the U.S. dollar index dropping up to 0.8% early Wednesday before paring losses to 0.3% after Trump’s public remarks. Several Republican senators voiced concerns about the potential fallout on markets and the Fed’s independence.
Senator John Kennedy of Louisiana warned that firing Powell would trigger a stock and bond market crash, noting the disruption it would cause to government borrowing costs. Senator Thom Tillis of North Carolina called such a move a “colossal mistake” that would undermine confidence in the Federal Reserve’s autonomy and trigger global shockwaves.
Since early this year, Trump’s administration has ramped up public and bureaucratic pressure on Powell. Accusations include claims of legal violations related to the Federal Reserve’s building renovation, with officials alleging that Powell misled Congress and disregarded oversight. Trump has replaced key planning commission members overseeing the renovation with loyalists, signaling a tightening grip.
Several administration figures have criticized Powell openly. Senior counselor Peter Navarro called him one of the worst Fed chairs in history, while Bill Pulte, head of the Federal Housing Finance Agency, urged Congress to investigate Powell.
What The Author Thinks
Removing Jerome Powell from the Federal Reserve Chair position amid turbulent markets would be a reckless move. Economic policy demands steady hands and institutional independence, not political brinkmanship. The Federal Reserve’s credibility is built on its ability to operate free from political interference, and undermining this risks destabilizing both domestic and global financial systems. Leaders should focus on constructive engagement rather than threats that could send shockwaves through the economy.
Featured image credit: Heute
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