Can Trump fire Federal Reserve Chair Jerome Powell after criticism over interest rates?

WASHINGTON - President Donald Trump has increased his criticism of Federal Reserve Chair Jerome Powell, expressing frustration over the central bank's reluctance to execute aggressive interest rate cuts.

In a statement posted to Truth Social, Trump remarked that Powell's "termination cannot come fast enough," emphasizing his dissatisfaction with the Fed's choices under Powell's leadership. The comments reflect ongoing tensions between the White House and the Federal Reserve over economic strategy and interest rate decisions. Powell’s term is set to expire next year.

Can Trump fire Federal Reserve Chair Jerome Powell?

What we know:

But can Trump fire Powell? The Chair does not believe so, according to his comments made during a speech to the Economic Club of Chicago on Wednesday.

"Our independence is a matter of law," Powell said during his address. "We’re not removable except for cause. We serve very long terms, seemingly endless terms. So we’re protected into law. Congress could change that law, but I don’t think there’s any danger of that. Fed independence has pretty broad support across both political parties and in both sides of the Hill."

Powell said the Fed will make its decisions based on what is best for all Americans. "That’s the only thing we’re ever going to do," Powell continued. "We’re never going to be influenced by any political pressure. People can say whatever they want. That’s fine, that’s not a problem. But we will do what we do strictly without consideration of political or any other extraneous factors."

Trump criticizes Fed policy

What we know:

Trump’s remarks followed Powell’s announcement that the Federal Reserve would keep its key interest rate unchanged. "For the time being, we are well positioned to wait for greater clarity" on the impact of policy changes in areas such as immigration, taxation, regulation and tariffs, he said. His comments on Wednesday preceded a decline in stock prices.

"Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS," Trump continued in his social media post.

While referencing the European Central Bank, Trump said Powell "should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!"

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Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C. on May 1, 2024. (Credit: Liu Jie/Xinhua via Getty Images / Getty Images)

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Powell defends central bank

Powell began Trump’s second term with positive economic conditions, including low unemployment and inflation nearing the Fed’s 2% target. However, Trump’s tariffs have increased recession risks, leaving Powell in a challenging position as the president appears to shift the blame for the weakening economy.

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