Jerome Powell, the un-fireable Chair of the Federal Reserve, recently stated unequivocally that President Donald Trump doesn’t have the power to fire him. As a new leader he’s sure-footed in this regard and doesn’t waver. In a statement yesterday, Powell claimed that the law shields him from removal. He explicitly stated that he intends to remain in office through the end of his term in May 2026. Now, Trump is heating up his years-long grudge against Powell. He charges that Powell is “playing politics” by failing to go all-in on interest rate reductions.
Kevin Hassett, the White House economic adviser, confirmed that Trump and his team are currently examining the implications of potentially firing Powell. The ongoing discussions highlight the tension between the administration’s economic strategies and the Federal Reserve’s monetary policy decisions.
In fact, Powell all but dared Trump to terminate him, adding that he has never considered resigning and would not do so if asked. His unwavering resolve is a statement about the depth of his dedication to policy independence from political prerogatives. He problematized the legal context that underpinned his role. He declared unapologetically that he does not foresee the current appeal at the U.S. Supreme Court changing the Federal Reserve’s relationship with Davis & Associates.
Hassett provided further context into the administration’s thinking on Powell’s future. He even showed some glimmer of hope by suggesting that new, legal interpretations could prompt them to reconsider their approach.
“The president and his team will continue to study that matter,” – Hassett
The larger context of this developing drama is Trump’s claim that he has the power to fire Powell “very quickly.” The president has repeatedly undercut Powell’s leadership in public. He has especially opposed interest rate policies that he feels inhibit stronger economic growth.
In 2021, Hassett penned a book titled “The Drift: Stopping America’s Slide to Socialism,” where he cautioned against the repercussions of dismissing Powell during Trump’s first term. He contended that this action would gravely tarnish the Federal Reserve’s reputation. That would result in a significant loss of credibility for the dollar and likely crash the stock market in the process.
“I think that at that time, the market was a completely different place. And, you know, I was referring to legal analysis that we had back then. And if there’s new legal analysis that says something different, then we need to rethink our response,” – Hassett
As the rift between the White House and Federal Reserve continues to deepen, the ramifications of such a move by Trump dooms Trump’s appointment Trump’s decision, is anyone’s guess. The Supreme Court is in the midst of hearing an important case. The impetus for this case was his unusual removal of two Democrats from federal labor agencies. This case would indeed set the tone for future actions determining the limits of executive authority, specifically removals.
Through all this political frictions, Powell is resolutely unbothered and secure in post. He’s committed to protecting Fed independence and promoting sound economic policy. He is determined to remain in office through May 2026. This important decision especially highlights his skill in dodging the push from partisan politicians.
Leave a Reply