President Trump said Tuesday he has “no intention of firing” Federal Reserve chair Jerome Powell, one day after the president called Powell a “major loser” and publicly lobbied the central bank chief to lower interest rates at a faster clip.
When asked by reporters in the Oval Office if he has any plans to fire Powell, Mr. Trump said he “never did” and claimed “the press runs away with things” — though he once again pressed Powell to cut interest rates, which remain elevated after the Fed hiked rates to quell inflation.
“This is a perfect time to lower interest rates,” Mr. Trump said. “If he doesn’t, is it the end? No, it’s not. But it would be good timing.”
Last week, Mr. Trump argued in a social media post that Powell is “always TOO LATE AND WRONG,” and said his “termination cannot come fast enough,” drawing speculation that the president could try to oust Powell before his four-year term ends next year.
Powell has led the Fed since 2018, after Mr. Trump initially nominated him for the job. Former President Joe Biden nominated Powell for a second term, bringing his time atop the central bank to at least May 2026.
It’s not clear if Mr. Trump has the power to fire Powell. According to federal law and past legal precedent, members of the Federal Reserve board — which includes the chair — can only be removed from their jobs before their terms expire “for cause.” However, the Trump administration has argued it has the legal right to fire members of other independent federal agencies, setting up a court fight over the issue that could have broad consequences.
The administration will “study” whether it has the right to fire Powell, National Economic Council Director Kevin Hassett told reporters last week.
For his part, Powell said last year he will not step down if Mr. Trump asks him to leave his job.
Why is Trump criticizing Powell — and why does it matter?
Mr. Trump’s feud with Powell revolves around the Fed’s decision to leave interest rates steady so far this year, after lowering rates from a decades-long high in late 2024. The decision has broad implications. Cutting interest rates can lead to higher economic growth and lower borrowing costs for businesses and consumers, which is why Mr. Trump is lobbying for cuts. But lower rates can also boost inflation. And while the inflation rate is now well below its 2022 peak, it remains above the Fed’s 2% year-over-year benchmark.
Powell has cited “uncertainty” for the Fed’s decision to pause rate cuts. Last week, Powell warned that Mr. Trump’s steep tariffs on foreign imports could lead to higher inflation and slower economic growth, posing a “challenging scenario” for the central bank.
Days later, Mr. Trump repeatedly lashed out at Powell on social media, calling him “Mr. Too Late” on Monday and arguing the Federal Reserve should slash rates more aggressively because there is “virtually No Inflation.”
The showdown — and the possibility Mr. Trump could try to fire Powell — have sparked concerns about whether the Federal Reserve will maintain its independence, allowing it to make decisions about economic policy without political influence. Stocks slumped Monday amid concerns about upheaval at the Fed, before rebounding Tuesday.
In an interview Sunday with “Face the Nation,” Austan Goolsbee, the president of the Chicago Federal Reserve, warned that a loss of independence would “undermine the credibility of the Fed.” Countries without independent central banks typically have worse inflation, slower economic growth and more sluggish job markets, he said.
Meanwhile, White House press secretary Karoline Leavitt told reporters earlier Tuesday the president “has the right to express…his displeasure with the Fed, and he has the right to say he believes interest rates should be lower.” Leavitt also said Mr. Trump believes the Fed has “been making moves and taking action in the name of politics.”
Mr. Trump has lashed out at Powell for years. The president sharply criticized Powell when the Fed hiked interest rates in 2018, before calling the central banker his “most improved player” after the COVID-19 pandemic prompted steep rate cuts in 2020.
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