President Trump has backed away—for now—from firing Federal Reserve Chair Jerome Powell, despite openly attacking him this week and suggesting he has the authority to remove him.
Driving The News: Speaking to reporters Thursday, Trump reignited tensions with the central bank, arguing that if he wants Powell out, “he’ll be out of there real fast, believe me.”
- The attack followed a social media post nicknaming the Fed Chair Powell “Too Late Jerome” and blaming the Fed for not cutting interest rates fast enough despite falling grocery and oil prices and revenue gains from tariffs.
Behind The Scenes: According to The New York Times, Trump has been repeatedly advised by aides that firing Powell would be both legally questionable and financially destabilizing. Officials warned such a move could trigger severe market volatility and spark a drawn-out legal battle.
- White House economic adviser Kevin Hassett acknowledged the door isn’t completely closed, telling reporters Friday, “The President and his team will continue to study that matter.”
- The Wall Street Journal editorial board also weighed in, warning that removing Powell could lead to “a protracted legal fight, with market turmoil to match as investors awaited a Supreme Court ruling on the legality of dismissal.”
Why It Matters: Though Trump appears momentarily swayed by the risks, the possibility of future conflict between the White House and the Fed remains live. Markets are already jittery from tariff policies and interest rate uncertainty—any renewed pressure on Powell could rattle investor confidence further.
Bottom Line: Trump may have paused his campaign against Powell, but with his legal team still researching dismissal options, markets will remain on alert for renewed Fed tensions or sudden shifts in tariff strategy.
