Trump Unlikely to Fire Powell Amid Fed Policy Disputes

President Trump has stated that he is highly unlikely to fire Federal Reserve Chairman Jerome Powell, despite recent discussions with some Republicans about the possibility. Trump acknowledged that the option of removing Powell had been considered, but he denied that a letter had been drafted to that effect. He also mentioned that Powell could potentially be removed for cause, specifically if there were evidence of fraud related to the Federal Reserve's building renovation.

Trump's comments came after a period of speculation and uncertainty, during which he had hinted at the possibility of firing Powell. In an Oval Office meeting, Trump stated that he did not rule out any options but believed it was highly unlikely that he would proceed with removing Powell. He reiterated this stance, saying that while Powell was doing a "lousy job," he was not actively considering firing him.

The president's remarks helped to calm some of the concerns that had been raised in the financial community. Trump's initial suggestions of potentially removing Powell had caused some unease, but his subsequent clarification that he was highly unlikely to do so provided a measure of reassurance. The president's public statements on the matter have been somewhat contradictory, with him initially hinting at the possibility of firing Powell and then walking back those comments.

Trump's discussions with Republican lawmakers about the potential removal of Powell were part of a broader dispute over the Federal Reserve's policies and its handling of the economy. The president has been critical of Powell's leadership and has expressed frustration with the Fed's decisions, particularly regarding interest rates and monetary policy. However, his recent statements indicate that he is not currently planning to take any action against Powell.

The situation highlights the ongoing tension between the White House and the Federal Reserve, with Trump's public comments adding to the uncertainty surrounding the central bank's leadership. Despite the president's criticisms, Powell remains in his position, and the Federal Reserve continues to operate independently in setting monetary policy. The dispute over the Fed's renovation project has added another layer of complexity to the relationship between the two institutions, but Trump's latest comments suggest that he is not planning to escalate the situation further.

Republican senators have expressed concern about the implications of firing the Fed chair over policy disagreements. Senator Thom Tillis warned of serious credibility risks for U.S. financial institutions if the Fed loses independence. Tillis emphasized that placing the Fed under direct presidential control would be a strategic mistake. Senator John Kennedy said Powell had done a “decent job” despite some policy disagreements. Senate Majority Leader John Thune added that Trump currently has no firm intention to fire Powell. The House Financial Services Committee canceled a scheduled meeting with Powell due to voting conflicts.

Trump nominated Powell in 2017 and Biden reappointed him in 2021. Powell has repeatedly stated his commitment to serving his term through May 2026. Treasury Secretary Scott Bessent has confirmed that the formal process to find a possible successor is already underway.