Topline
President Donald Trump denied Wednesday he has plans to fire Federal Reserve Chair Jerome Powell, after he reportedly met with congressional Republicans on Tuesday night to discuss removing him following weeks of pressure that has tested the agency’s independence.
The president spent months criticizing Powell for failing to cut interest rates.
Key Facts
At a meeting related to Republicans’ efforts to push through crypto legislation this week, Trump showed legislators a draft of a letter to fire Powell, The New York Times first reported.
Trump also polled the members of Congress present about firing Powell and received a positive response, Reuters later confirmed.
But shortly after the news broke, Trump threw cold water on the speculation, telling reporters he had no current plans to fire the Fed chair: “I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud.”
Although Powell was first appointed by Trump in 2017, Trump criticized his predecessor, former President Joe Biden, for nominating him for a second term.
Powell’s decisions not to cut interest rates have drawn Trump’s ire for months, but in recent weeks the president has focused his criticism on reports that the Federal Reserve has gone $700 million over budget for renovations to its headquarters.
In the past, Trump has repeatedly said he would not fire Powell, but National Economic Council Director Kevin Hassett told ABC News on Sunday his removal was “a thing that’s being looked into.”
Meanwhile, Treasury Secretary Scott Bessent said a “formal process” to find a successor for Powell, whose four-year term ends in May 2026, has already begun.
The Federal Reserve Board of Governors declined to comment on the record.
This is a breaking story and will be updated.
Can Trump Fire Powell?
Although the Federal Reserve’s chair and board of governors are nominated by the president, the central bank largely operates independently. No president has tried to fire the chair of the central bank since its founding in 1913. A Supreme Court decision in 1935 found that then-President Franklin D. Roosevelt could not fire the commissioner of the Federal Trade Commission, a similar independent organization, based on policy alone. However, the Trump administration has successfully challenged this ruling in the past, with the Supreme Court allowing the president to temporarily fire members of the National Labor Relations Board and the Merit Systems Protection Board. Powell has previously said he would not resign before his term ended if Trump asked him to.
Who Would Replace Powell?
Although Bessent said a search was underway, it’s not clear who Trump would tap to serve as chair. Kevin Warsh, a member of the Fed’s Board of Governors, is widely seen as a frontrunner. Other sources told Bloomberg on Wednesday that Hassett is also still in the running. Other names that have been floated include David Malpass, the former president of the World Bank Group, as well as Bessent himself.
Tangent
Russell Vought, the director of the Office of Budget and Management, also accused Powell of presiding over an “ostentatious overhaul” of the Fed’s headquarters that is $700 million over budget, which he said has expanded up to $2.5 billion in total cost. “These renovations include terrace rooftop gardens, water features, VIP elevators, and premium marble. The cost per square foot is $1,923—double the cost for renovating an ordinary historic federal building,” Vought said in a statement. Trump brought up the renovation again speaking with reporters on Wednesday. “It’s possible there’s fraud involved in the $2.5, $2.7 billion renovation,” Trump said. “There could be something to that, but I think he’s not doing a good job.”
Key Background
Powell has served on the Fed’s Board of Governors since 2012. Trump nominated him as chair in 2017, but quickly soured on him after Powell decided to raise interest rates in 2018. Powell was nominated for a second four-year term by former President Joe Biden in 2021. Speaking to reporters Wednesday, Trump doubled down on his past criticism and blamed Biden for Powell remaining in the role. “He’s a terrible Fed chair,” Trump said. “I was surprised he was appointed. I was surprised, frankly, that Biden put him in and extended him.” Though Powell’s term as Fed chair ends next year, his term as a member of the board of governors does not end until January 2028.
