Will Trump Remove Fed Chair Powell?

US President Donald Trump has kept markets guessing over whether he might remove Federal Reserve Chair Jerome Powell from office. White House economic adviser Kevin Hassett confirmed that the president and his team are “still studying” the option to fire Powell. Speaking in the Oval Office, Trump declared, “If I want him out, he’ll be gone real fast.” He later added, “I have no intention of firing him,” briefly calming investors.

Under the Federal Reserve Act of 1913, governors can only be removed for “cause,” traditionally understood to mean misconduct, while the statute remains silent on specific provisions for the chair role. Trump’s rhetoric sparked concerns about Fed independence, driving a temporary spike in volatility. Equity index futures on Wall Street jumped nearly 2% following his comments on rate cuts and tariffs. UK financial authorities have warned that anxiety over Fed independence could spill over into the gilt market. Some lawmakers fear Congress may be powerless to block a presidential removal of the Fed chair. Reports note that Trump backed down from his firing threat after advisors warned of potential market instability.

The uncertainty surrounding Trump’s stance continues to fuel concerns among Fed officials, who stress the vital importance of central bank autonomy.