President Donald Trump said Wednesday it was “highly unlikely” he would fire Federal Reserve Chair Jerome Powell, appearing to reverse course less than a day after floating the idea with Republican lawmakers and sparking a temporary dip in the stock market.
Speaking to reporters in the Oval Office, Trump said, “No, we’re not planning on doing anything,” when asked about Powell’s fate. “I don’t rule out anything but I think it’s highly unlikely unless he has to leave for fraud,” he added, referencing criticism of Powell’s handling of costly renovations at the Fed’s Washington headquarters.
Background: GOP Meeting Fuels Speculation
The president’s remarks followed a private meeting with GOP lawmakers Tuesday evening in which he reportedly asked their views on ousting Powell. According to a senior White House official, the feedback was broadly supportive, and Trump suggested a decision was imminent. Rep. Anna Paulina Luna, R-Fla., echoed that sentiment on social media, declaring Powell’s firing was “imminent.” Her post contributed to a sell-off in U.S. stock futures, though markets stabilized by midday Wednesday.
The meeting took place after Republicans blocked a procedural vote on a White House-backed cryptocurrency bill, adding tension to the administration’s relationship with the Federal Reserve and financial regulators.
Legal and Policy Concerns
While the Trump administration has voiced frustration with Powell over the Fed’s refusal to cut interest rates, legal scholars say the president has limited authority to remove a sitting Fed chair. A recent Supreme Court decision underscored that Fed officials are protected from at-will dismissal, except under narrow circumstances such as proven misconduct or incapacity.
Trump’s reference to “fraud” appeared to allude to criticisms of the Fed’s ongoing $2.1 billion headquarters renovation. Administration allies have increasingly cited the project as a possible justification for removal, though no formal allegations of wrongdoing have been made.
Administration and Congressional Responses
Treasury Secretary Scott Bessent told Bloomberg News Tuesday that he did not expect Trump to take action against Powell, and Rep. French Hill, R-Ark., chair of the House Financial Services Committee, downplayed the possibility in a CNBC interview Wednesday. “I don’t see it happening,” Hill said.
The Federal Reserve declined to comment on reports of Trump’s Tuesday night discussion. Powell himself has not publicly responded to the speculation.
Broader Context: Trump’s History with Powell
Trump appointed Powell to lead the central bank in 2018 but has since clashed with him over monetary policy. Trump has publicly pressured the Fed to cut rates, blaming its decisions for slowing economic growth. The most recent tensions coincide with a broader push by the White House to stimulate the economy ahead of the 2024 election cycle.
This is not the first time Trump has expressed frustration with Powell. In 2019, the president reportedly explored whether he could demote the Fed chair but was warned such a move could rattle financial markets and trigger legal challenges.
Next Steps: Status Quo—For Now
Despite Tuesday’s saber-rattling, Trump on Wednesday appeared to shelve any immediate plans to dismiss Powell. The president’s remarks suggest he may be retreating from the idea amid backlash from markets, legal experts, and within his own administration.
