What Happens If Trump Tries to Fire Powell? Your Most Pressing Questions Answered | CNN Business

President Trump has been vocal about his frustrations with Federal Reserve Chair Jerome Powell. He wants interest rates cut significantly and has even hinted at firing Powell. This tension intensified over a $2.5 billion renovation of the Fed’s Washington headquarters, which some officials claim is mismanaged. Recently, Trump suggested that it might be “highly unlikely” he would fire Powell, but he hasn’t completely ruled it out.

Firing Powell would be a first in the Fed’s 111-year history. It could lead to chaos in financial markets and wouldn’t guarantee lower interest rates, as Powell is just one of twelve voting members on interest rate decisions. The process for removing a Fed official is complex, and experts say Trump would need to show serious cause for any removal.

Under U.S. law, the president can remove a Fed governor “for cause,” which generally means misconduct or inefficiency. Disagreements over policy aren’t enough for this type of removal. Even if Powell were removed, he could still potentially fight back in court, arguing that his firing was unjust.

History shows that no president has attempted to remove a Fed chair in the last century, making this situation legally uncertain. If Trump were to proceed, it could take months, even years, before a resolution occurs. Meanwhile, if Powell’s removal were delayed by the courts, Vice Chair Philip Jefferson would step in.

Despite the calls for Powell’s resignation, not all voices in the administration agree. Treasury Secretary Scott Bessent has expressed confidence in Powell, suggesting he should complete his term ending in May 2026. However, he also supports a thorough review of the Fed and its operations.

In a time when interest rates are a hot topic, a 2023 survey by the Federal Reserve found that 70% of Americans view rising rates as a threat to their economic well-being. This sentiment reflects concerns over affordability and economic stability, showing that the public is paying close attention to the actions of the Fed and the administration.

In social media, reactions to Trump’s threats against Powell vary widely. Some support strong leadership changes at the Fed, while others fear the implications of such actions on market stability. As events unfold, it’s clear that the relationship between the White House and the Fed is under intense scrutiny.

For more insights on the Federal Reserve’s actions and implications, you may check out the Brookings Institution’s analysis here.

Source link