Fed Chair Powell's Removal 'Imminent' as Trump Considers Firing Amid Rate Cut Odds Fading

President Trump met with House Republicans to discuss firing Fed Chair Powell, whom he has criticized for failing to lower interest rates. The group sided with Trump, and sources say he will move forward with Powell's removal. The odds of a July rate cut have declined to 2.6%, and Powell's term ends in May 2026. The law requires "cause" for removal, although the Fed's $2.5 billion renovation has been cited as a potential reason.

President Donald Trump met with House Republicans to discuss the potential removal of Federal Reserve Chair Jerome Powell, citing concerns over the central bank's interest rate policies and a costly renovation project. The group, which included several lawmakers who voted against advancing cryptocurrency legislation, sided with Trump, according to multiple sources with direct knowledge.

Sources inside the administration have confirmed that Trump has been weighing the possibility of firing Powell for months, with the Fed chair's handling of the $2.5 billion renovation project being cited as a potential reason. The renovation, which includes the overhaul of two Fed buildings in Washington, has been a point of contention for Trump, who argues that the project is a waste of taxpayer money [3].

Powell, who was initially appointed by Trump in 2017, has maintained that the renovation project is not as extravagant as portrayed by the media. He has stated that there are no VIP dining rooms, new marble, or other special features as claimed by critics [1].

The Federal Reserve's independence from political influence is a cornerstone of U.S. monetary policy. The law requires "cause" for the removal of a Fed chair, and the legal precedent for such an action is unclear. The U.S. Supreme Court has indicated that Trump may not have the authority to fire Powell, as the Federal Reserve is a "uniquely structured, quasi-private entity" [2].

The meeting with House Republicans comes as the odds of a July rate cut have declined to 2.6%, according to financial markets. Powell's term as Fed chair ends in May 2026, and his potential removal could have significant implications for the U.S. economy and financial markets.

References:
[1] https://www.foxbusiness.com/politics/trump-slams-knucklehead-fed-chair-powell-says-interest-rates-should-below-1
[2] https://www.cbsnews.com/news/trump-asked-gop-lawmakers-if-he-should-fire-jerome-powell-sources/
[3] https://apnews.com/article/federal-reserve-building-renovations-trump-powell-70cfb70f2c09105c2a144179d5d92e69