US President Donald Trump has again called for the resignation of Federal Reserve Chairman Jerome Powell. Trump’s latest demand that Powell “resign immediately” comes amid growing tensions between the White House and the US central bank. The President complains that Powell’s resistance to reducing interest rates is strangling economic growth.
This follows days after Trump wrote to Powell calling for drastic rate cuts and shortly after a top housing official charged Powell with “political bias” and “deceptive testimony.”
Federal Housing Finance Agency Director Bill Pulte called on Congress to probe Powell on Wednesday. Pulte blamed the Fed chair for deceiving Congress about the cost of renovating the Federal Reserve’s Washington headquarters. He also implied Powell was politically biased in recent actions.
Trump replied to Pulte on Truth Social using his “Too Late” moniker for Powell and called on him to resign immediately.
Trump Blames Powell for Economic Drag
Trump has repeatedly disparaged Powell since assuming office in January. Trump contends that the wait-and-see monetary policy of Powell has damaged the economy. Trump wants the Fed to cut its benchmark interest rate—now between 4.25% and 4.5%—”a lot.”
Lower rates cut the cost of borrowing, which can stimulate economic growth. But rate cuts also have the potential to feed inflation. As Trump’s blanket new tariffs beckon, economists anticipate price pressures to increase. Powell, in contrast, has held off from reducing rates, noting it is essential to gauge the complete effect of tariffs before taking action.
Powell Defends Fed Independence
Addressing the ECB Forum in Portugal, Powell stated, “We didn’t overreact. In fact, we didn’t react at all; we’re simply taking some time.” He explained that inflation expectations jumped sharply after Trump’s announcement of tariffs and hence the central bank held back.
Trump is still not content. Trump stated in April “the termination cannot come fast enough” for Powell, although he later recanted after a stock market decline. He stated last week that he would “love” for Powell to quit on his own.
Can Trump Fire Powell?
Though repeatedly threatening to do so, Trump cannot lawfully fire Powell for policy differences. A Fed chairman under US law may be dismissed only “for cause,” i.e., for specific malfeasance. The Supreme Court reaffirmed this restriction in May, declaring that the Fed has special legal status among US agencies.
Nevertheless, Trump indicated to reporters on Tuesday that he has “two or three” possible successors in mind but refused to identify them. As Powell’s term continues until May of 2026, the confrontation between the Federal Reserve and the White House seems far from over.