US President Donald Trump continued his oral attacks on the chairman of the Federal Reserve Jerome Powell on Monday to further reduce interest rates because of the rejection of the Fed.
On social media, the President Powell referred to the US economy when he said that a slowdown would come into the US economy unless “Lord too late, a big loser, now lowers interest rates”.
This happened after Trump in another social post in another truth “cannot come quickly enough” in the past week.
While the Federal Reserve – the central bank of the US government – is an independent position, Trump put it under pressure to reduce interest rates.
Many economists say that the increasing attacks on Powell are afraid that Trump could ultimately try to dismiss the US Central Bank boss. This fear largely contributed to the collapse of the financial markets yesterday, added experts.
The S&P 500 fell by 2.4 percent yesterday, Dow Jones’s industrial average fell by 2.5 percent and the Nasdaq fell 2.6 percent to end another turbulent day on Wall Street.
The US President Donald Trump continued to criticize the chairman of the Federal Reserve, Jerome Powell on Thursday and said: “Oh, he will go … If I ask him about it, he will be out there when he welcomed the Italian Prime Minister Giorgia Meloni to the Oval Office. Trump did not answer a follow -up question if he would try to remove Powell.
A move from Trump to Fire Powell would probably send an anxiety screws through the financial markets. While Wall Street loves lower prices, mainly because they increase the share prices, the greater concern that a less independent FED does not exist so effectively in keeping inflation under control. Experts fear that such a step could weaken the United States’ reputation as the safest place in the world, if not killed to keep cash.
Powell was first nominated by Trump in 2017 and then appointed for another term in 2021 under Bidens Administration. His term as chairman does not end for another year in May 2026.
But how much power does the president actually have to get rid of Powell? We know the following.
Can Trump fire Powell?
It is unclear whether Trump has the authority.
The Federal Reserve Act from 1913, in which the Fed is determined, scheduled that members of its Governor Council, which was appointed by the President and confirmed by the Senate as a staggered 14th anniversary, and can only be removed for “cause” that they mean misconduct, not the political difference.
However, the law indicates the reference to the limits of the distance from the description of the four-year term of office of the Fed chairman, which is one of the seven governors.
Has that happened before?
There is no direct legal precedent because no president has ever tried to dismiss a Fed boss.
However, there are complaints that are now being processed by the dishes about Trump’s shots that are not related. These are observed as possible deputies as to whether he has this force.
At the moment, one is pending in front of the Supreme Court, where every attempt to shoot Powell would almost certainly end up.
What would the discharge of Powell mean in a practical terms?
There would be a lot to hang out how Trump could “fire” the Fed boss.
Like each of his predecessors, Powell has three roles chairman of the Federal Reserve System, member of the board of directors and chairman of the interest rate of the federal interest rate, which is the open market committee (FOMC).
Can Trump suppress it? Only as a fed chair?
If Trump were trying to remove Powell as chairman of the FED system, Powell could remain a governor until this term runs at the end of January 2028. The next vacant position of the board of directors will only take place in January 2026, which would only leave Trump the opportunity to appoint one of the other governors as chairman.
Two of these six six were appointed by Trump in his first term – the governors Christopher Waller and Michelle Bowman. Trump recently nominated Bowman as deputy chairman for banking supervision.
Like Powell, both spoke about the importance of the Fed independence, so it is not clear that both would provide immediate interest rates as Trump wants.
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What about him as a FOMC head?
Trump has no direct control over who leads the FOMC. The FOMC chairman is selected annually by the 12 members of the committee -the seven governors, the President of the Federal Reserve Bank of New York and four of the other regional bank president, the rotating panel.
Through tradition, the FOMC chooses the Fed chair as a head, with the New York president being fed as deputy chairman. In theory, however, they were able to choose one of the members, including Powell if he were still a governor.
And what about him as a governor?
Removing Powell as a governor would have the greatest influence.
If it would withstand the legal challenge, Trump would give both a job as well as a free chair and chair cars with its own candidate for his own choice. It would also open the door to shoot, like many of the other governors, as he delighted to install a wider FED leadership that he saw as a compliance with his wishes.
Would Powell be able to challenge it?
If it happened, Powell would have the position of questioning his dismissal before a federal court, but he would have to finance these efforts with personal resources. As a lawyer and former private equity leader, he probably has personal prosperity to finance such an effort.
When he was asked in November last year if he would go if Trump asked him to step down, Powell said without a doubt: “No.”
In response to the questions of the reporter at a press conference after the US Federal Reserve Cuts interest rates, FED chairman Jerome Powell said that he would not withdraw if the elected US President Donald Trump was asked and the president had no authority to remove the head of the FED over a policy. Powell was appointed by Trump and finally meets him during the first term of office of the Republican President.
Powell has also repeatedly said that he believes that his removal is not permitted in the law, and recently said that he does not believe that the cases that are now being processed by the courts apply to Trump’s discharge of other independent federal committees and agency members that apply to the FED.
Will it actually happen?
The Wall Street Journal reported last week that Trump was fired over Powell and replaced him by Kevin Warsh, who acted as a governor between 2006 and 2011. Warsh, according to the newspaper, advised against it and advised Trump Powell to deliver as a Fed chair in May 2026 until the term.
Last week, the White House economic advisor, Kevin Hassett, also said as a potential replacement for Powell that the matter was the subject of an ongoing study within the administration.
