Can Donald Trump Fire the Fed Chief? Powell’s Fate Hangs in the Balance

With Donald Trump back in the Oval Office, tensions between the White House and the US Federal Reserve continue to make headlines. The US President has openly criticized Fed Chair Jerome Powell in recent weeks, even suggesting he could remove him from office. 

Amidst all this imbroglio, the burning question remains if a sitting president can actually fire the head of the central bank?

Grounds for removal?

Powell, who was first appointed by Trump in 2018 and reappointed by President Joe Biden, is serving a four-year term, which is set to expire in May 2026. Under US law, the president cannot remove a Federal Reserve Board member without cause—defined as “misconduct” or “neglect of duty”, not policy disagreements.

This legal safeguard is intended to preserve the Fed’s independence, allowing it to make economic decisions—such as setting interest rates—without interference from the executive branch.

Also Read: Why Trump Wants Fed Chair Jerome Powell Out? | Republic World

Point of discontentment

Trump’s criticism stems from the Fed’s recent decisions to hold interest rates steady, despite ongoing economic uncertainty. He has argued that rate cuts are needed to offset the impact of new tariffs his administration is imposing, calling Powell's stance "political."

On his part, Powell has remained firm. Speaking at an event in Chicago last week, he stressed that the Fed’s decisions will be based solely on economic data, not politics.
“Our role is to maintain stable prices and support the labour market, "he told reporters without elaborating further. 

Likely consequences

Legal experts reckon that any attempt by Trump to remove Powell would likely trigger a legal battle and raise serious questions about the future independence of the Federal Reserve. While a pending Supreme Court case could redefine presidential powers over federal agencies, it’s unclear whether the ruling would apply to the Fed, as per experts. 
Legal scholars and financial experts, however, warn that forcing Powell out could “undermine global confidence” in the U.S. economy and markets.
For the time being, Powell continues to lead the Fed. But with political pressure mounting, the central bank’s independence may face one of its biggest tests in decades.