In brief
Former President Donald Trump has expressed it is "highly unlikely" he will fire Jerome Powell, the US Federal Reserve chair, after a wave of speculation stirred by prior comments to lawmakers.
Following reports of Trump’s discussions with Republican lawmakers about potentially ousting Powell, stock markets and the dollar experienced a temporary dip before recovering. The president has persistently criticized Powell, whom he appointed in 2017, urging for lower interest rates. His critique intensified last week when allies accused Powell of mismanagement regarding Fed property renovations.In a series of remarks, Trump lambasted Powell, calling him a "knucklehead" and emphasizing that he believes Powell is "doing a lousy job." Although Trump acknowledged a revival of talks about dismissing Powell, he insisted he was "not planning on doing anything." When asked if he could rule out the possibility, he stated, “It's highly unlikely unless he has to leave for fraud.”Powell's current term as Fed chair is set to end in May next year, although he can continue serving as a governor of the central bank until 2028. The Federal Reserve operates independently of presidential influence, as established by Congress. Powell has previously asserted that the president cannot fire him due to policy disagreements, but White House officials indicated a removal could occur for justifiable reasons.Treasury Secretary Scott Bessent revealed that a "formal process" is underway to consider potential replacements for Powell, with Bessent himself mentioned as a candidate alongside current National Economic Council head Kevin Hassett and economist Kevin Warsh. Powell was appointed in the latter part of Trump's presidency, following Janet Yellen, who was originally of the Obama administration, with President Biden extending Powell's term in 2021.
