President Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step down when his term ends on May 15, due to an ongoing Department of Justice investigation into building renovations at the Fed. Trump has expressed dissatisfaction with Powell’s handling of interest rate cuts, which he believes are too slow. However, legal experts argue that firing Powell would be legally questionable unless it is “for cause,” as outlined in the Federal Reserve Act of 1913. Powell’s term as chair ends soon, but he can remain a Fed governor until 2028. The confirmation of Kevin Warsh as the new Fed chair is delayed, partly due to a senator’s refusal to vote until the investigation is resolved. This situation could lead to a legal battle and complicate the transition to a new Fed chair.
QUESTION: How might the ongoing tension between President Trump and Jerome Powell impact the stability of the U.S. economy?
Why Jerome Powell — not Trump — will decide when the Fed chief steps down
