Trump says he won’t fire Fed chair — but he’s not ruling out
Donald Trump’s Mixed Message on Fed Chair Jerome Powell
President Donald Trump said on Wednesday that he was not currently planning to fire Jerome Powell, the Chairman of the U.S. Federal Reserve, but added that he did not rule out the possibility. Trump’s ambiguous stance sparked a surge in the 30‑year U.S. Treasury yield, pushing it above five percent.
Trump’s “Lousy Job” Admission
When asked about ejecting Powell, the president described his current performance as a “lousy job,” yet he was not referencing Powell’s role. Trump added: “I don’t rule out anything, but it’s highly unlikely.” He noted that when Powell’s term ends next year, he would be able to choose a replacement who would support lower interest rates.
Powell’s Term and Legal Independence
- Powell’s term as Fed Chair does not conclude until May 2026.
- He has said he does not intend to resign early and emphasizes the U.S. central bank’s independence as a matter of law.
- A recent Supreme Court ruling implies Fed officials can only be removed for cause, interpreted as wrongdoing.
Trump’s Recent Attacks on Powell
- Trump has repeatedly called Powell a “numbskull” and “moron.”
- Late Tuesday, he suggested that a $2.5 billion renovation plan at the Fed could constitute a fireable offense, adding: “I think it sort of is.”
- He floated allegations of fraud related to the renovation, though no details were provided.
Political Support and Draft Letter
- Trump reportedly received backing from his party to remove Powell, telling Republican lawmakers he would do so.
- A White House official noted that lawmakers expressed approval for the potential removal.
- The New York Times reported that Trump showed a draft letter to oust Powell at a meeting with about a dozen House Republicans, though he stated he only “talked about the concept” of removal.
Market Reaction
- The dollar fell about 1 % against the euro before recovering, while gold gained.
- The Dow Jones Industrial Average remained flat, whereas the S&P 500 and Nasdaq both slipped 0.1 %.
- Investors expressed concerns that Trump’s comments could undermine the Fed’s policy credibility, causing a temporary dip in market indices.
