Trump demands termination of fed chair Jerome Powell

President Donald Trump has repeatedly demanded that Federal Reserve Chairman Jerome Powell be fired. This escalates a long-standing disagreement over interest rate policies. The conflict revolves around Trump’s belief that the Federal Reserve should cut interest rates sharply to boost economic growth, a stance that clashes with Powell’s approach.

As reported by CNBC, Trump’s criticisms grew stronger after Powell warned about how the Trump administration’s tariffs could drive up inflation. Trump is frustrated because he believes Powell is “always too late and wrong” when it comes to changing interest rates.

He argues that the European Central Bank has cut rates multiple times and that Powell should take similarly bold action. However, Trump’s argument may overlook the fact that the European Union has not imposed tariffs as large as those introduced by the Trump administration. Powell has repeatedly stated that the administration’s tariffs are likely to push inflation higher, meaning that aggressive rate cuts could backfire and make the situation worse.

Trump is trying to oust Federal Reserve Chairman Jerome Powell

The disagreement underscores the tension between the executive branch and the independent Federal Reserve, per Newsweek. Trump’s trade policies have created a complicated economic situation. While the tariffs were meant to shield domestic industries, they have also raised worries about higher prices for consumers and weaker economic growth. Powell’s careful approach to adjusting interest rates reflects his duty to balance inflation and employment, a dual responsibility given to the Fed by Congress.

Cutting rates while inflation is rising due to tariffs could lead to even higher prices. Powell has consistently stressed that the Federal Reserve must remain free from political influence, saying its decisions should be guided by economic data, not political pressure.

He has also stated that the president cannot fire him without “cause,” a legal standard backed by Supreme Court rulings. Though Trump has previously shown that he is willing to defy this precedent by removing leaders from other independent agencies, Powell has said that he plans to serve his full term. He has also received support from both Democrats and Republicans in Congress, who back the Fed’s independence.

Trump’s repeated calls for Powell’s removal, including statements saying Powell’s firing “cannot come fast enough,” pose a major challenge to the legal and operational structure of the Federal Reserve. These remarks, posted on Trump’s social media platform, have drawn mixed reactions from politicians. For example, Senator Chuck Schumer publicly supported the Federal Reserve’s independence, stressing its importance for a strong economy.

The legal consequences of Trump’s demands remain unclear. While current laws protect the Federal Reserve’s independence and limit the president’s ability to remove its chair without proper cause, Trump’s past behavior suggests he may try to push these legal boundaries. How it is resolved will have major effects on the Federal Reserve’s independence and the stability of the U.S. economy.