Trump Escalates Feud: Calls for Fed Chief Powell’s “Termination”

On Thursday, former President Donald Trump intensified his long-standing criticism of Federal Reserve Chair Jerome Powell, publicly demanding Powell’s “termination” for what Trump described as a failure to cut interest rates quickly enough. Trump’s remarks, posted on his social media platform, came just after Powell had warned about the economic risks of Trump’s sweeping tariffs, which he said put the Fed in “unfamiliar territory” and risked pushing the U.S. economy toward stagflation—a combination of high inflation and rising unemployment.

Powell’s Cautious Approach Fuels Trump’s Frustration
Powell, speaking at the Economic Club of Chicago, emphasized the need for patience in monetary policy, stating that the Fed required more clarity on the administration’s trade policies before making further rate decisions. He warned that the tariffs could make it harder for the central bank to achieve its dual mandate of stable prices and maximum employment. Trump, however, has repeatedly insisted that Powell is “too late and wrong,” arguing that the Federal Reserve is lagging behind the European Central Bank, which recently cut rates for the seventh time in a year.

Central Bank Independence Under Political Pressure
Trump’s latest outburst has reignited concerns about the political independence of the U.S. central bank. While Powell’s term as chair runs through May 2026, and legal precedent protects him from removal without cause, Trump’s rhetoric has drawn attention to the ongoing debate over the president’s authority to dismiss the Fed chair. Powell has repeatedly affirmed that removal by the president is “not permitted under the law,” underscoring the importance of central bank autonomy in maintaining economic stability.

Tariffs, Inflation, and Economic Uncertainty
The dispute between Trump and Powell is rooted in divergent views on tariffs and monetary policy. Powell and other Fed officials have warned that Trump’s tariffs could fuel inflation and increase unemployment, potentially tipping the economy into recession. Trump, meanwhile, claims that tariffs are making the U.S. “rich” and insists that lower interest rates are needed to boost economic growth. The clash has contributed to market volatility, with investors wary of the potential for further economic disruption.

Legal and Historical Context: Limits of Presidential Power
Historically, the Supreme Court’s 1935 decision in Humphrey’s Executor v. United States set limits on the president’s power to remove independent agency heads, including the Fed chair. While Trump has previously removed members of other independent agencies, the legal consensus remains that the president cannot unilaterally fire the Fed chair without cause. Nonetheless, the issue may face renewed scrutiny, especially if Trump seeks to test these boundaries in the courts.

AIgnite Opinion

Trump’s public demand for Jerome Powell’s removal highlights the persistent tension between political leaders and central bank independence—a cornerstone of modern economic governance. While the president’s frustration over monetary policy is not new, open calls for the “termination” of a sitting Fed chair risk undermining confidence in the institution’s ability to make impartial decisions. This episode underscores the importance of maintaining clear legal and institutional boundaries to safeguard economic stability, especially in times of heightened political and economic uncertainty.

Key Takeaways

• Trump has publicly called for Fed Chair Jerome Powell’s “termination,” citing dissatisfaction with the pace of interest rate cuts.
• Powell has warned that Trump’s tariffs could fuel inflation and unemployment, complicating the Fed’s policy decisions.
• The dispute raises concerns about the independence of the Federal Reserve and the legal limits of presidential authority over the central bank.
• The European Central Bank has cut rates multiple times, fueling Trump’s criticism that the Fed is lagging behind.
• Legal precedent protects the Fed chair from removal without cause, but the issue may face renewed legal scrutiny if challenged.
• Market volatility has increased amid the escalating feud and uncertainty over future economic policy.