Powell Resists Trump Pressure to Resign Defends Fed's Policy Independence

Federal Reserve Chair Jerome Powell has publicly and privately reaffirmed his commitment to maintaining monetary policy independence and resisting political pressure from President Donald Trump, despite escalating public criticism and threats of removal. Trump has repeatedly labeled Powell “stupid,” “a numbskull,” and “one of my worst appointments,” while publicly demanding rate cuts to stimulate the economy. The president’s campaign has included unverified claims that Powell is preparing to resign and a symbolic visit to the Fed’s headquarters, where he joked about lowering rates during a tense tour. Powell, however, has dismissed these efforts, emphasizing that his decisions are guided by economic data rather than political influence.

Behind closed doors, Powell has argued that resigning would undermine the Fed’s institutional independence, a principle he has long defended since his 2017 nomination by Trump. “He feels very strongly that his responsibility is to maintain that independence,” said Senator Mike Rounds, a Republican who directly questioned Powell about stepping down. The Fed Chair has told allies he plans to serve out his full term, which ends in May 2026, and will not alter the central bank’s policy trajectory due to external pressures. This stance has been reinforced by his consistent adherence to data-driven decision-making, even as the White House has scrutinized the Fed’s ongoing $2.5 billion renovation project and hinted it could be grounds for termination.

The conflict underscores broader tensions between executive authority and the Fed’s statutory mandate to insulate monetary policy from short-term political demands. Trump and his aides have pushed for immediate rate cuts to offset the inflationary risks of proposed tariffs, but Powell and the Fed have insisted on first evaluating how protectionist policies might affect price stability. The president has framed the Fed’s inaction as “unpatriotic,” accusing Powell of artificially raising costs for American households. Meanwhile, White House strategists have reportedly explored a $2.5 million plan to weaken Powell’s position, though details remain unclear.

Analysts highlight that the standoff reflects a fundamental clash over the role of the Federal Reserve in a democratic system. While Trump’s rhetoric signals frustration with slow economic adjustments, the Fed’s cautious approach prioritizes long-term stability over immediate political gains. Powell’s refusal to yield has reinforced perceptions of the central bank’s institutional resolve, but the prolonged conflict risks eroding public trust in both the Fed and the administration’s economic governance. The absence of rate cuts—despite market expectations—has also raised questions about the Fed’s ability to navigate conflicting signals from policymakers.

As the situation remains fluid, Trump has recently hinted he may not proceed with firing Powell, even as he continues to publicly antagonize the central bank. Powell’s steadfastness has been framed by allies as a defense of the Fed’s apolitical mandate, with the chair asserting that staying silent and maintaining his position is the best way to protect the institution from external influence. The standoff, however, has intensified scrutiny of how the Fed balances its dual mandate of maximum employment and price stability against the political pressures of a divided administration.

[1] [2] [3] [4] [5] [6] [7]

Source: [1] [Fed's Powell vows to resist Trump's pressure to resign](https://finance.yahoo.com/news/fed-powell-vows-resist-trump-132340694.html)

[2] [Trump visits Federal Reserve and tussles with Jerome Powell](https://www.opb.org/article/2025/07/25/trump-jerome-powell-fed/)

[3] [Trump says he believes Powell is ready to start lowering rates](https://www.cnbc.com/2025/07/25/trump-says-he-believes-powell-is-ready-to-start-lowering-rates.html)

[4] [Trump visits the Federal Reserve in escalation of pressure](https://www.washingtonpost.com/politics/2025/07/24/trump-powell-federal-reserve-visit/)

[5] [Fed Chair Jerome Powell refuses to resign or cut rates](https://www.mitrade.com/insights/news/live-news/article-3-988718-20250726)

[6] [What Is Powell Saying Amid Trump's Pressure to Resign?](https://www.economies.com/forex/news/what-is-powell-saying-amid-trumps-pressure-to-resign%20-46959)

[7] [The Fed Renovations Fueling Trump's Anger at Jerome Powell](https://www.nytimes.com/2025/07/24/business/trump-federal-reserve-renovations-powell.html)