Trump 'not planning' to fire Fed Chair Jerome Powell, despite reports
Trump criticizes Fed Chair, says Biden appointed him
In the Oval Office, President Donald Trump harshly criticized Federal Reserve Chair Jerome Powell, and claimed that he never should have been appointed; it was Trump who appointed Powell in 2018.
President Donald Trump said he’s "not planning" to fire Fed Chair Jerome Powell following reports that he had drafted a letter for Powell’s termination.
According to The New York Times, Trump reportedly showed Powell’s termination letter to House Republicans Tuesday night and polled them on whether he should follow through, but Trump said Wednesday that there is no letter.
Trump has been calling for Powell’s resignation since taking office for a second term in January, repeatedly criticizing Powell for not lowering the Fed’s short-term interest rate. Trump has said he has the power to fire Powell if he chooses to, and most recently began accusing Powell of mismanaging the U.S. central bank’s $2.5 billion renovation project.
FILE - US President Donald Trump shakes hands as he announces his nominee for Chairman of the Federal Reserve, Jerome Powell, in the Rose Garden of the White House in Washington, DC, November 2, 2017. / (Photo credit should read SAUL LOEB/AFP via Get
Will Trump fire Jerome Powell?
What they're saying:
"I think he does a terrible job," Trump said when asked about Powell at the White House. "He's costing us a lot of money, and we fight through it … The country has become so successful that it doesn't have a big impact, but it does hurt people wanting to get a mortgage. People want to buy a house. He's a terrible fed chair."
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Still, Trump said "no, we’re not planning" on firing Powell, despite reports indicating otherwise.
President Trump on Russia, tariffs & Fed Chair Powell
President Donald Trump takes questions at the White House ahead of departing for Pennsylvania. Trump spoke to reporters alongside Press Secretary Karoline Leavitt.
"I don't rule out anything, but I think it's highly unlikely," Trump said, unless he finds fraud with the Fed’s renovation project.
"There could be something to that. But I think he's not doing a good job. He's got a very easy job to do," Trump added.
Why does Trump want to fire Jerome Powell?
The backstory:
Powell was initially nominated by Trump in 2017 and was appointed to another four-year term by Democratic President Joe Biden in 2022. Trump has said Powell should lower interest rates because "we have essentially no inflation," but Powell has resisted and made clear that the Fed’s independence is "a matter of law."
Big picture view:
The Fed chair has been an obstacle in Trump’s efforts to gain total control over the executive branch.
Fed Chair Jerome Powell speaks on U.S. economy
U.S. Federal Reserve chair Jerome Powell spoke on the state of the economy at the Economic Club of Chicago.
Powell and his board have the dual mandate of maximizing employment and keeping prices stable, a task that can require them to make politically unpopular moves such as raising interest rates to hold inflation in check. The general theory is that keeping the Fed free from the influence of the White House — other than for nominations of Fed officials — allows it to fulfill its mission based on what the economy needs, instead of what a politician wants.
By the numbers:
The Fed sharply raised rates in 2022 and 2023 to slow borrowing and spending and tame inflation, which dropped steadily from a peak of 9.1% in 2022 to 2.4% in March. Inflation is not far from the Fed’s target of 2%, but it crept up in June to 2.7%, its highest level since February. The Fed cut rates three times at the end of last year.
RELATED: June CPI inflation report: Which prices changed the most last month
Can Trump fire Powell?
Asked in April whether he has the authority to fire Powell, Trump said "if I want him out, he’ll be out of there real fast, believe me."
On social media, Trump has lamented that "Powell’s termination cannot come fast enough!"
The other side:
At a news conference in November, Powell indicated he would not step down if Trump asked him to resign. Powell’s term ends in May 2026.
Trump looks to remove Jerome Powell as Fed Chair
President Donald Trump shared on social media today that he wouldn't mind if Fed Chair Jerome Powell was removed. This comes a day after Powell warned that Trump's tariffs are larger than expected, and could have a negative impact on the economy.
"We’re not removable except for cause. We serve very long terms, seemingly endless terms," Powell said.
Dig deeper:
The Supreme Court recently signaled that Trump can’t fire Powell simply because the president disagrees with him on interest rates. But legally he could do so "for cause," such as misconduct or dereliction of duty.
What would happen if Trump fires Powell?
Why you should care:
An attempt to remove Powell from his job before his term ends in May 2026 would undercut the Fed’s long-standing independence from day-to-day politics and could lead to higher inflation, higher interest rates and a weaker economy, according to The Associated Press.
The Source: This report includes information from President Donald Trump's remarks at the White House, The Associated Press and previous LiveNow from FOX reporting.