Donald Trump Denies Plans to Fire Federal Reserve Chairman Jerome Powell

President Donald Trump has categorically denied reports that he is planning to fire Federal Reserve Chairman Jerome H. Powell, despite recent speculation and internal White House discussions suggesting otherwise. The denial came after Trump met with Republican lawmakers at the White House and raised the issue of whether he should remove Powell from his position.

According to two anonymous sources familiar with the meeting, Trump appeared to signal that he was considering firing Powell, following the lawmakers’ apparent support for the idea. However, when directly asked about the possibility of firing Powell, Trump stated that the media reports were “not true” and insisted that “we’re not planning on doing anything.”

Despite his denial, the potential threat of removal has already had an impact on financial markets, with stocks initially dropping before recovering after Trump’s statement. Powell, a frequent target of Trump’s criticism, has been a key figure in shaping U.S. monetary policy, and his removal would be a significant move with far-reaching consequences.

Trump has long expressed frustration with Powell, arguing that lower interest rates would help the U.S. manage its growing budget deficits. However, the recent episode appears to go beyond previous threats, with Trump suggesting he might attempt to remove Powell for cause, citing the Federal Reserve’s spending on a major office renovation in Washington, D.C.

Legal experts have pointed out that while the Supreme Court has indicated that Trump cannot fire Powell over policy disagreements like interest rates, he could attempt to remove him for cause, which typically requires evidence of misconduct or dereliction of duty. Some analysts believe the renovation criticism may be a strategic move to build a legal case against Powell, even if it is a thinly veiled attempt to pressure the Fed.

Historically, Trump’s advisors have cautioned against attempting to remove Powell, warning that such a move could undermine market confidence in the Federal Reserve’s ability to combat inflation. This, in turn, could lead to higher borrowing costs, which would be counterproductive to the administration’s goal of reducing the cost of financing federal deficits.

Interestingly, during his remarks, Trump falsely claimed that President Biden had placed Powell in the position, despite the fact that Trump himself nominated Powell to serve as Fed chairman in 2017. Powell was reappointed by Biden in 2022 and has remained in his role since.

As the situation continues to unfold, the Federal Reserve’s independence remains a topic of intense debate. Powell has made it clear that he will not resign early and is prepared to defend his position against any attempts to remove him.