Trump Revives Talk of Ousting Fed Chair Powell

President Donald Trump on Wednesday renewed public speculation about removing Federal Reserve Chairman Jerome Powell, telling reporters that several Republican legislators favored the idea.

Markets Whipsawed by the Headlines

Although Trump later insisted he has no immediate plan to dismiss Powell, the mere discussion rattled Wall Street. “The rhetoric alone is stoking volatility and uncertainty,” said Jack Ablin, chief investment officer at Cresset Capital, which oversees roughly $65 billion. Early in the session, fears of Powell’s ouster lifted bond yields and pushed stocks lower. Once Trump backtracked, yields retreated and equities rebounded, highlighting investors’ preference for an independent Fed. The major indexes eventually closed higher, while Treasury yields finished mostly lower.

Trump’s Oval Office Remarks

Speaking in the Oval Office during a meeting with Bahrain’s Crown Prince Salman bin Hamad Al Khalifa, Trump recounted a conversation with GOP lawmakers. “I asked, ‘What do you think about firing him?’ Almost every one of them said I should, but I’m more conservative than they are,” he said. Later he added, “When we talked it through, they all recommended letting him go.”

A History of Presidential Pressure

Trump nominated Powell in his first term yet has criticized him throughout his second, accusing the Fed of keeping rates too high to the detriment of growth and federal borrowing costs. Presidential attempts to sway the central bank are not new—Lyndon Johnson and Richard Nixon each leaned on their Fed chiefs—yet, as GlobalData chief U.S. economist Steve Blitz noted, “Trump’s doing it in public and believes the publicity gives him leverage.”

Analysts Warn of Political Fallout

Blitz and other observers worry that Trump’s ability to rally lawmakers behind him could undermine the Fed’s autonomy. “He’s the first president who seems able to make the establishment fold,” Blitz told USA TODAY. “The question is whether leaders will choose principle over fear.”

Powell’s Tenure and Legal Safeguards

Powell’s term as chair runs until 2026, after which he could remain on the Board of Governors until 2028. He has declared his intention to serve out his mandate and maintains that the president lacks the legal authority to fire him.