Trump Indicates Intent to Fire Fed Chair Powell Amidst $2.5 Billion Renovation Scrutiny

Washington D.C. – President Donald Trump has informed a group of Republican lawmakers that he intends to dismiss Federal Reserve Chairman Jerome Powell, a move that would mark a significant challenge to the central bank's traditional independence. The announcement, initially reported via a tweet from ALX 🇺🇸 stating, > "BREAKING: President Trump tells a room full of GOP lawmakers that he will fire Federal Reserve Chairman Jerome Powell," comes amidst escalating tensions over monetary policy and recent scrutiny of the Fed's headquarters renovation costs. This statement has reignited debate over the President's authority to remove the head of the independent institution.

President Trump confirmed discussing the possibility of firing Powell with House Republicans, though he later stated it was "highly unlikely unless he has to leave for fraud." This "for cause" argument centers on the ongoing $2.5 billion renovation of the Fed's Washington headquarters, which the administration alleges has been mismanaged and features excessive costs. Officials like OMB Director Russell Vought have publicly criticized the project, suggesting potential legal violations.

The relationship between President Trump and Chairman Powell has been strained since Powell's appointment by Trump in 2018, primarily due to the President's persistent demands for lower interest rates. Trump has frequently used social media to criticize Powell, often nicknaming him "Mr. Too Late" for what he perceives as slow action on rate cuts. Powell, whose current four-year term as Chair runs until May 15, 2026, has consistently affirmed the Fed's commitment to its dual mandate of stable prices and maximum employment, independent of political pressure.

The Federal Reserve's independence is widely considered crucial for maintaining economic stability and market confidence. Historically, an autonomous central bank is seen as better equipped to make long-term monetary policy decisions free from short-term political considerations, which can otherwise lead to inflation and financial instability. Legal scholars note that the Federal Reserve Act allows for the removal of a Fed Governor, including the Chair, only "for cause," a term generally interpreted as malfeasance or neglect of duty, not policy disagreements.

Any attempt to remove Chairman Powell without clear legal grounds would likely trigger a complex legal battle and could significantly roil financial markets. Experts warn that such an action would undermine the credibility of the U.S. financial system and could lead to higher borrowing costs and a loss of investor confidence. Powell has previously stated he would not resign if asked, emphasizing that his removal is "not permitted under the law" without cause.