Former President Donald Trump has privately threatened to dismiss Federal Reserve Chair Jerome Powell if he remains on the central bank’s board, according to sources familiar with the discussions. The remarks, made during recent closed-door meetings with advisors, reflect Trump’s long-standing frustration with Powell’s monetary policy decisions.
The Federal Reserve’s independence is traditionally shielded from direct political interference, with governors serving staggered 14-year terms. However, legal scholars note that the Federal Reserve Act allows presidents to remove board members ‘for cause,’ though this power has never been tested against a sitting chair.
‘This is consistent with Trump’s pattern of attacking institutions that don’t align with his preferences,’ said a former White House economic official who requested anonymity. ‘But actually removing a Fed chair would create unprecedented market turmoil.’
Analysts suggest the threat may be aimed at influencing Powell’s policy decisions ahead of the November election, particularly regarding interest rate cuts. The Fed currently faces pressure to balance inflation control against signs of economic slowing.
Market reaction was muted, with one Wall Street strategist noting: ‘Most investors view this as campaign rhetoric rather than actionable policy. But it does raise constitutional questions about Fed independence that could resurface if Trump wins.’