According to a senior White House official, US President Donald Trump is planning to fire Chairman Jerome Powell soon.
It was also discovered that Trump developed this possibility in a meeting with Republicans in Congress last night.
The majority of lawmakers who attended the meeting supported the move, but officials noted that Trump has not yet made a final decision and could change his mind. Trump, who has long been critical of Powell about the Fed’s decision to stabilize interest rates, reportedly began searching for alternatives. Powell’s term of office will usually run until May 2026.
The development, first reported by CBS News, came to the fore during a meeting with Republican lawmakers opposed to the cryptocurrency bill. Florida president Anna Paulina Luna posted on social media, “We’ve heard from very serious sources that Jerome Powell will be fired!” In a follow-up message, she added, “I’m urgent that 99% of the bullet each is imminent.”
Trump has also sternly criticised the rapidly escalating renovations at the Fed’s Washington headquarters. He told reporters: “This is a dishonorable. It’s a government building, not a palace.” He continued his criticism of Powell, saying, “She was a complete soulless person, but she didn’t know that she wanted to live in luxury.”
Powell said on her part that media reports about the corrections were “inaccurate” and called for an investigation by a Fed inspector earlier this week. She also cited the Fed Act in an April statement, saying, “The President has no authority to remove Fed Chairmans. Legally, we can only remove them for serious causes.”
But Trump’s rejection of Powell will not only induce sharp market volatility, but will rekindle debates about the limits of the president’s power over independent US institutions. According to Jim Bianco, president of Bianco Research, such developments could lead to sales in the bond market and sharp rises in interest rates. “The surge in yields following interest rate cuts at the end of last year is an example of how the market responds to the wrong message,” Bianco said. “The same thing could happen again.”
*This is not investment advice.
