Can Trump Fire Powell? The Law Says No

President Trump cannot fire Federal Reserve Chairman Jerome Powell because the law specifies that the Fed is independent and free from political interference. Powell's term as Chairman ends in 2024, and it is unlikely that Trump could extend his term or appoint a new Chairman before then. Any attempts to remove Powell would likely face legal and political challenges.

In recent months, President Donald Trump has publicly criticized Federal Reserve Chair Jerome Powell for not lowering interest rates, even threatening to remove him from his position. However, legal and political challenges may prevent Trump from successfully firing Powell, according to the Federal Reserve Act and historical precedent.

The Federal Reserve Act, enacted in 1913, grants the president the power to remove any member of the Fed's Board of Governors "for cause," which includes malfeasance, neglect of duty, or inefficiency. However, the law does not allow removal for policy differences, such as Trump's disagreement with the Fed's wait-and-see approach on interest rates [1].

Trump's attempts to remove Powell have been centered around the Fed's $2.5 billion renovation project in Washington, D.C. The White House has claimed that the project is mismanaged, citing cost overruns. Some Republicans have alleged that Powell lied to Congress about the project's scope. However, Powell has maintained that he will not leave the post early, and his term as Chair ends in May 2026 [1].

Trump has also suggested that Powell will leave his office in 8 months, but Powell's tenure as Chair will officially end in 10 months. The president has stated that he believes Powell will be resigning soon, but Powell has not indicated any intention to do so [3].

Any attempt to remove Powell would likely face legal challenges. The last presidential for-cause removal proceeding occurred a century ago, and the process is legally uncertain. Powell would have the chance to respond to a removal order and could sue to argue that his firing was unjustified [1].

The Fed's independence is a longstanding norm in U.S. financial policy. Attempts to interfere with the Fed's decision-making process could spark a landmark legal battle and turmoil in financial markets. The Fed's Vice Chair, Philip Jefferson, would temporarily preside over the Fed's policy meetings if Powell were removed [1].

In conclusion, while Trump has publicly criticized Powell and suggested that he could be removed, legal and political challenges may prevent him from successfully firing the Fed Chair. Powell's term as Chair ends in 2026, and any attempts to remove him would likely face significant legal and political hurdles.

References:
[1] CNN. (2025, July 22). FAQ: If Trump fires Powell. Retrieved from https://www.cnn.com/2025/07/22/economy/faq-if-trump-fires-powell
[2] The Economic Times. (2025, July 22). Donald Trump's Fed tour ends with relief for Jerome Powell. Retrieved from https://economictimes.indiatimes.com/news/international/global-trends/donald-trumps-fed-tour-ends-with-relief-for-jerome-powell/articleshow/122911086.cms
[3] Cryptopolitan. (2025, July 22). Trump pins Powell to leave Fed in 8 months. Retrieved from https://www.cryptopolitan.com/trump-pins-powell-to-leave-fed-in-8-months/