Trump Vows to Fire Fed Chair Powell, Signals Rate Cuts Under Successor Warsh
Summary
President Donald Trump declared Wednesday he will remove Federal Reserve Chair Jerome Powell if he does not step down voluntarily, while signaling he expects his preferred successor, Kevin Warsh, to lower interest rates once confirmed.
The threat escalates a months-long standoff between the White House and the central bank, raising the prospect of a legal confrontation over the limits of presidential authority over an institution explicitly designed to operate free from political interference. Markets have historically responded sharply to perceived threats to Fed independence, making the timing — amid already elevated macro uncertainty — particularly consequential.
Powell’s term as chair expires in May, though his seat on the Fed’s Board of Governors runs through 2028. He has stated he will not resign his board position until a Justice Department investigation into a Fed building renovation project is “well and truly over.” Trump said in the Fox Business interview, taped Wednesday, that he has no intention of ending that probe.
The DOJ investigation is itself a complicating factor for Warsh’s confirmation. Senator Thom Tillis of North Carolina, a swing vote on the Senate Banking Committee, has said he will block Warsh’s confirmation until the probe is resolved, citing threats to Fed independence. Despite that opposition, the committee has scheduled a confirmation hearing for Warsh on April 21.
US prosecutors made a surprise visit to the Fed’s Washington offices Tuesday but were denied entry. A separate legal challenge involving Trump’s attempt to remove Fed Governor Lisa Cook remains before the Supreme Court, undecided.