President Donald Trump said Wednesday that he wasn’t planning to fire Federal Reserve Chair Jerome Powell — but he wouldn’t rule it out either.
Firing the Fed chair would be unprecedented and legally untested. The Fed is a politically independent institution, designed to insulate decisions that dictate financial markets, including monetary policy, from the whims of politics.
“I don’t rule out anything, but I think it’s highly unlikely,” President Donald Trump told reporters during a meeting in the Oval Office.
Trump has previously said he would let Powell serve out his term, which ends in 2026. But CBS News first reported Wednesday that Trump had asked Republican lawmakers if he should fire Powell, and he indicated he would. The New York Times then reported that the president showed lawmakers the draft of a letter to fire the Fed chair.
“Those are reports, but they’re not true,” Trump told reporters Wednesday. Trump also denied showing Republican lawmakers a draft letter.
But Powell is “not doing a very good job,” Trump said, raising questions about an expensive expansion of the Fed building.
“He’s got a very easy job to do. You know what he has to do? Lower interest rates,” Trump said.
Powell, a lifelong Republican, has repeatedly said he would not resign if the president asked him to.
The president is allowed to fire the Fed chair “for cause,” but the bounds of that have not been tested. Trump said he thinks Powell is “already under investigation” and that he “spent far more money than he was supposed to on rebuilding” the Fed headquarters in Washington, a $2.5 billion project.
Powell reportedly asked the inspector general to conduct a review of the renovation costs.
Trump himself appointed Powell in 2017 but quickly soured on the central bank chair. He repeatedly and publicly criticized Powell — first for raising rates, then not cutting rates fast enough — during his first term, a line of attack he has picked back up during his second term.
Former President Joe Biden reappointed Powell in 2021, a move that angered progressives, who were also pushing Powell to cut interest rates. The central bank, which slashed interest rates to near zero at the start of the pandemic, aggressively raised rates to tamp down pandemic-induced inflation, which peaked at 9.1% in June 2022.
The Fed has cut rates from a two-decade high peak of 5.25-5.5% down to 4.25-4.5%, and Powell said the central bank was holding off on cutting rates due to uncertainty from the president’s tariffs.
The president has repeatedly lashed out at “Too Late Powell,” pushing him to cut rates, which would make it cheaper for businesses to borrow money and consumers to take out a mortgage, car loan or pay down their credit cards.
“He’s a terrible Fed chair,” Trump said Wednesday. “We had the worst inflation in history under Biden, and now we have almost no inflation. We’ve done a great job, and we should have the interest rates cut.”