In a bold gambit that could rock the U.S. economy, Trump is quietly plotting to oust Federal Reserve Chair Jerome Powell, risking a showdown over the central bank's cherished independence and threatening chaos in global financial markets.

For months, Trump has vented frustration over Powell's refusal to slash interest rates to support his trade agenda, even musing about replacements like former Fed governor Kevin Warsh. As Treasury Secretary Scott Bessent urges caution and legal hurdles loom, the White House is gearing up to interview candidates for the Fed chair role this fall, leaving Powell's fate—and the economy's stability—in limbo.

Trump's Push to Remove Powell

For months, President Trump has been weighing the idea of dismissing Federal Reserve Chair Jerome Powell, whose term extends until May 2026.

According to Trump advisors familiar with the matter, these discussions have taken place in private settings, including meetings at Trump's Mar-a-Lago estate in Florida. Trump has consulted with Kevin Warsh, a former Fed governor, about the possibility of ousting Powell and potentially appointing Warsh as his successor.

However, Warsh has counseled against such action, advising Trump to allow Powell to complete his term without interference. Despite this, conversations about removing Powell have persisted, with some advisers discussing the matter with Trump as recently as early March.

Trump's dissatisfaction with Powell centers on the Fed chair's refusal to lower interest rates, which Trump believes are critical to bolster the economy amid his administration's trade policies. "If we had a Fed Chairman that understood what he was doing, interest rates would be coming down, too," Trump said. "He should bring them down."

During an Oval Office meeting on Thursday, Trump asserted his authority to remove Powell, stating, "If I want him out, he'll be out of there real fast, believe me." He further criticized Powell, accusing him of "playing politics" with monetary policy and expressing frustration with his performance. In a Truth Social post, Trump escalated his rhetoric, declaring, "Powell's termination cannot come fast enough!"

Any attempt to fire Powell would likely spark a legal battle, potentially escalating to the Supreme Court, and could disrupt financial markets. Inside the White House, opinions are split. Some advisors have warned against the move, citing significant risks, while other advisers advocate for a more aggressive stance, questioning the Fed's independence. For now, Trump has not finalized his decision.

Bessent Warns of Market Turmoil

Treasury Secretary Scott Bessent has emerged as a voice of restraint within the White House, repeatedly cautioning against any attempt to fire Jerome Powell.

According to sources close to the administration, Bessent has emphasized that such a move could destabilize financial markets, particularly given the current volatility driven by Trump's trade war and tariff policies. He has described the Fed's independence as a "jewel box" that the U.S. must preserve, arguing that the costs of removing Powell far outweigh any potential benefits.

Bessent and other advisers have reinforced the risks of market instability, drawing lessons from Trump's first term. In December 2018, Trump considered firing Powell after rate hikes triggered a market plunge, only for markets to rebound once he backed off.

For now, Powell's position appears secure, though Trump's unpredictable nature keeps the possibility alive. Bessent has indicated that the White House will begin interviewing candidates for the Fed chair role this fall, signaling preparations for a potential transition, even if Powell remains in place. The interplay between Trump's attacks and Bessent's caution underscores the delicate balance between political pressure and economic stability.

Can Trump Legally Axe Powell?

The question of whether Trump can legally fire Jerome Powell remains unresolved and untested.

The Federal Reserve Act stipulates that Fed governors, including the chair, can only be removed "for cause," a term typically interpreted as misconduct or incapacity—not policy disagreements like those Trump has with Powell over interest rates. Legal experts argue that a court would likely reject a dismissal based on monetary policy differences, setting the stage for a significant legal challenge if Trump proceeds.

Powell has signaled he would resist any attempt to remove him, stating during a speech at the Economic Club of Chicago, "We're never going to be influenced by any political pressure... Our independence is a matter of law." He has also made clear he would not resign if asked, bolstering his position with the Fed's legal protections. Historically, no Fed chair has been removed by a president, and the 1935 Supreme Court ruling in Humphrey's Executor v. United States reinforces limits on presidential authority over independent agencies.

The Trump administration is currently challenging similar protections in a Supreme Court case involving other agencies, which could influence the Fed's status if the precedent is overturned. However, Powell has expressed confidence that this case would not apply to the Fed. Even if Trump succeeded legally, practical hurdles remain. The Federal Open Market Committee could re-elect Powell as its chair, allowing him to retain influence over monetary policy until legal disputes are resolved—potentially beyond his term's end in May 2026.