Former President Donald Trump has reportedly threatened to fire Federal Reserve Chair Jerome Powell if he does not resign by May, according to sources familiar with private discussions. The remarks mark a significant escalation in Trump’s long-standing criticism of the central bank’s leadership.
Trump’s relationship with Powell has been contentious since 2018 when the then-president publicly criticized the Fed’s interest rate hikes. The tension resurfaced during Trump’s 2024 campaign, where he repeatedly blamed Powell for economic challenges. ‘He’s always been too slow to act,’ Trump said of Powell during a recent rally, though he stopped short of direct removal threats at the time.
Legal experts note that while presidents traditionally respect the Fed’s independence, the Federal Reserve Act does allow for the removal of board members ‘for cause.’ However, no Fed chair has ever been fired in the institution’s 110-year history. ‘This would create a constitutional crisis,’ said a former Treasury official who requested anonymity. ‘The markets would react violently to any perceived politicization of monetary policy.’
Market analysts suggest the threat could create uncertainty ahead of the Fed’s June policy meeting. ‘Even if this is just rhetoric, it introduces volatility into an already fragile economic outlook,’ said Mark Williams, a former Fed examiner now teaching at Boston University.