President Donald Trump sharply criticized Federal Reserve Chair Jerome Powell on Thursday for not lowering interest rates, reviving a controversial threat from his first term by suggesting he has the authority to remove Powell from his position. The comments risk reigniting a legal and political battle over the independence of the central bank, a principle that has guided U.S. monetary policy for decades.
“If I want him out, he’ll be out of there real fast, believe me,” Trump told reporters in the Oval Office during a meeting with Italian Prime Minister Giorgia Meloni. “I’m not happy with him.”
The remarks came shortly after Trump posted on his social media platform, demanding that Powell slash the Fed’s short-term interest rate. He added pointedly that “Powell’s termination cannot come fast enough.” Powell’s current term runs through May 2026.
Trump originally nominated Powell to lead the Fed in 2017, but has since grown increasingly critical of his decisions. Powell was later reappointed by President Joe Biden in 2022 for another four-year term, reinforcing the bipartisan tradition of Federal Reserve independence from political pressure.
Powell, for his part, has maintained that he will not resign even if pressured by the president. At a news conference last November, he stated unequivocally that the Federal Reserve operates independently by law. “We’re not removable except for cause,” Powell said. “We serve very long terms, seemingly endless terms.” He reiterated those remarks during a Wednesday event hosted by the Economic Club of Chicago.
The idea of a president trying to remove a Fed chair for policy disagreements would mark a historic break from precedent and likely trigger a legal fight over executive authority. Trump’s renewed threats come at a time of heightened tensions over economic policy, particularly as the administration faces growing scrutiny over inflation, interest rates, and the broader impact of its tariff strategy.
While Powell has faced criticism from both sides of the aisle during his tenure, Trump’s direct attacks and hints at dismissal have alarmed economists and market watchers, who warn that undermining the Fed’s independence could destabilize financial markets and hurt long-term economic stability.
The public clash between the president and the central bank chair adds another layer of uncertainty to an already turbulent economic environment and sets the stage for what could be a major confrontation between the White House and the Federal Reserve in the months ahead.