Trump’s Displeasure with Powell Reaches Boiling Point. Here’s What He Might Do

The drama playing out between former U.S. President Donald Trump and Federal Reserve Chair Jerome Powell is heating up again. Rumors are swirling online recently, claiming that Powell is about to be fired.

This all came from Florida Congresswoman Anna Paulina Luna, who took to X (formerly Twitter) to say she’s “99% sure firing is imminent,” citing a “very serious source.” Now, whether or not that happens is still very much up in the air, but the tension is real.

The Battle Between Trump and Jerome Powell 

Trump has never really been a fan of Jerome Powell. His main issue with him? Powell has not cut interest rates as aggressively as Trump would like. Trump believes slashing the Fed’s key interest rate would save U.S. taxpayers billions in interest payments and give the economy a nice jolt. According to Trump, Powell’s caution is hurting the economy, and he has not been shy about expressing this view.

The clash between Trump and Powell has created an unusual scenario where a sitting or former President is openly attacking the traditionally independent central bank.

Powell, for his part, has stood his ground, and he’s been clear about it. According to Powell, the Fed is meant to be independent, and its decisions shouldn’t be swayed by political pressure. In fact, Powell once hinted that without Trump’s aggressive tariffs, the Fed might have already gone ahead with rate cuts. But with tariffs clouding economic forecasts and raising inflation concerns, the Fed decided to hit pause.

Now, here is the Big Question: Can Trump actually fire Powell?

Powell has previously said that the President cannot fire him. But, like most legal questions, there’s more than one opinion. Legal experts are split on whether it’s even possible. The Federal Reserve Act of 1913, which governs how the Fed operates, was designed to shield it from political meddling. A Supreme Court ruling from the 1930s adds to that protection, suggesting that a Fed chair can only be removed for serious misconduct, things like neglect of duty, inefficiency, or wrongdoing.

Russel Morgan, from The Morgan Legal Group, put it plainly: trying to remove Powell would likely lead to a lengthy and messy legal battle. So, even if Trump wanted to give Powell the boot, it wouldn’t be so easy. Let’s not forget that Powell’s current term as Fed chair runs through May 2026.

That means the President can’t make the Fed chair disappear overnight, unless, of course, he chooses to resign or gets removed through a rare and complicated legal process. Interestingly, after all the buzz about Powell’s potential firing, Trump slightly walked things back.

Trump Sits on The Fence

When asked by reporters in the Oval Office if he planned to fire Powell, Trump said he’s not planning to do so, at least not right now. But he didn’t hold back on criticism, saying the Fed Chair is doing a terrible job and insisting again that interest rates should be lower.

And it’s important to note that Powell hasn’t ruled out a rate cut entirely. At a recent press briefing, he said the Fed’s July 29- 30 policy meeting is still on the table for potential action. But economists say we probably won’t see any rate cuts before September.

So, what’s really going on here? It’s a classic clash between politics and policy. Trump wants quick fixes and bold moves to juice the economy. Powell wants to play the long game, making sure inflation and other factors are under control.

Whether or not Jerome Powell stays in his seat, one thing’s clear: the Fed’s independence is being tested in ways it hasn’t seen in decades.