President Donald Trump reportedly floated the idea of dismissing Federal Reserve Chair Jerome H. Powell during a meeting with House Republicans this week. According to two individuals briefed on the meeting who spoke with the New York Times, Trump showcased a drafted letter to fire Powell and sought advice from roughly a dozen lawmakers, indicating he was leaning toward action.
The meeting in the Oval Office was initially intended to address concerns over cryptocurrency legislation, but Trump shifted focus to express dissatisfaction with Powell — whom he appointed in 2017 during his first term. Trump’s push for lower interest rates contrasts with Powell’s cautious approach amid inflation concerns.
While Trump appears determined, some within his orbit have reportedly warned him about the significant risks of firing Powell. Such a move could be calamitous and trigger wide-ranging consequences, they have cautioned, highlighting potential financial and political fallout that Trump might not fully anticipate.
Trump’s consideration of Powell’s removal has set off a wave of speculation. Whether he will act on his grievance against the Fed chair remains uncertain, but the possibility has reignited debates about the independence of America’s central bank and the broader implications of political intervention in economic governance.
The U.S. dollar $USDX experienced volatility in response to the news this week, reflecting market unease. While Trump later suggested firing Powell was “highly unlikely,” speculation intensified following an X post by Anna Paulina Luna, a Republican congresswoman from Florida, who wrote on Tuesday night that she was “hearing” that the Fed chair would be fired, and his sacking would be “imminent”.
Meanwhile, criticism of a costly Fed headquarters renovation has fueled tensions further. Wall Street leaders, including JPMorgan Chase’s $JPM CEO, Jamie Dimon, have cautioned against giving Powell his marching orders.
“I think the independence of the Fed is absolutely critical,” Dimon told media members in a call after the bank’s earnings announcement this week.
Powell has a constitutional mandate to stay in his job until 2027 and has declined comment on the reports.
—BBTW editor Peter Green is away, so Cheddar’s VP of Content, Lauren Babbage, is filling in.
