Can President Trump actually fire Fed chief Powell?

US PRESIDENT Donald Trump has recently intensified his attacks against Federal Reserve chair Jerome Powell, criticising him for not cutting interest rates quickly enough and calling for his “termination”.

The comments came a day after the central bank chief delivered a blunt warning about the effect of Trump’s wide-ranging tariffs on the economy.

Powell said at an event in Chicago on Apr 16 that the Trump administration has brought “very fundamental policy changes”, including sweeping tariffs that are “significantly larger than anticipated”. He said such changes are unlike anything seen in modern history, putting the Fed in uncharted waters and on a path to confront a challenge it hasn’t seen in decades.

Trump lashed out at the Fed leader, saying that the US central bank is lagging behind the European Central Bank (ECB), which announced it was cutting interest rates for the seventh time in a year.

“Jerome Powell of the Fed, who is always too late and wrong, yesterday issued a report which was another, and typical, complete ‘mess!’,” Trump wrote on his social media platform. “Powell’s termination cannot come fast enough!”

The president would later tell reporters: “I don’t think he’s doing the job. He’s too late. Always too late. A little slow and I’m not happy with him. I let him know it.”

“We have a Federal Reserve chairman that’s playing politics,” he said, adding that the Fed not cutting interest rates “plays right into (ECB’s) hands”.

“The Fed really owes it to the American people to get interest rates down, that’s the only thing he’s good for,” stated Trump. “I think at some point he will. He’s going to have a lot of political pressure, you know they are political also and I think there’s a lot of political pressure for him to lower interest rates.”

Open question

The president has on several occasions threatened to remove Powell from his post, and criticism of the Fed head stretches back to 2018, when Powell took the reins of the world’s most powerful central bank.

In 2019, Trump even called Powell “the enemy”. In March 2020, he told reporters he had the “right to remove (Powell) as chairman” and that “he has, so far, made a lot of bad decisions, in my opinion”, after markets tanked amid the pandemic.

According to The Wall Street Journal, Trump has for months privately discussed firing the Fed chair, but he hasn’t made a final decision about whether to try to oust him before his term ends next year.

The president has expressed confidence that he has the authority to oust Powell. “If I want him out, he’ll be out there real fast, believe me,” he told reporters at the Oval Office.

Powell was first appointed as Fed chair by Trump in 2018 and was later reappointed by then president Joe Biden in 2022. His current term ends in May 2026.

In response to Trump’s threats, Powell has pointed out that removing a Fed chair was “not permitted under the law”, saying that he intended to serve out the remainder of his term.

However, that legal protection, which comes as a result of the Fed’s status as an independent institution, may be, legally speaking, an open question.

Trump has already fired two members of the Federal Trade Commission (FTC) which, like the Fed, is also a long-independent agency, arguing that their “continued service on the FTC is inconsistent with my administration’s priorities”.

He also fired two Democrats on the three-member board of the National Credit Union Administration (NCUA), a federal insurer and regulator of credit unions, leading some to argue that the move violated the bipartisan statutory framework adopted by Congress to protect credit union members and their deposits.

In addition to the FTC and the NCUA firings, Trump removed a Democratic member of the National Labor Relations Board and another person serving on the Merit Systems Protection Board who identifies as a Democrat, both of whom have sued for their jobs back. Supreme Court Chief Justice John Roberts asked both sides to submit briefs last week.

At the same time, the Supreme Court is expected to revisit a 1935 case that established precedent over how much power a sitting US president has in removing agency heads. Its decision could weaken the Fed’s independence.

The 1935 case involved a then member of the FTC who was fired by former president Franklin Delano Roosevelt in 1933 over policy differences. The court ruled in favour of the plaintiff, saying that the Constitution did not say the president had the “illimitable power of removal”.

In February, the Trump administration said that case should be overturned. If the court overturns that ruling, Trump would be in a better legal position to fire Powell.

Trump and his team are now studying whether firing Powell is an option, according to National Economic Council director Kevin Hassett.

“The president and his team will continue to study that matter,” Hassett said, when asked during a press conference if removing Powell from his post was likely.