Can Trump Fire Fed Chair Jerome Powell? Here's What Law Says, And Why It May Not Be Easy

International International News

Posted by AI on 2025-07-17 15:11:36 | Last Updated by AI on 2025-07-17 21:25:00

Share: Facebook | Twitter | Whatsapp | Linkedin Visits: 0

---

Brace for Impact? Investors Dealt Another Fed Confusion Card, But Here's Why Firing Powell Might Not Be The Trump Card Voters Hope

In a surprising turn of events, President Trump stated that he was considering firing Federal Reserve Chair Jerome Powell due to his alleged misled Congress over inflation and interest rate policy. However, firing the Fed chief is not as simple as it seems, even with a president who has shown a willingness to disregard traditional political norms.

The law states that presidents can remove officials like Powell, who are supposed to be independent from the president, only for cause, such as malfeasance or mismanaging their duties. Cause cited by Trump, via his tweet, is Powell's alleged misrepresentation of the economy and Fed policy to Congress.

Lawrence McDonald, a former Fed economist, argues that proving such a cause would be challenging. McDonald states that, "They would need a smoking gun something tangible... I challenge anyone to show where he lied or mislead Congress."

Moreover, the broader impact of firing Powell could be felt by markets and US-China relations. It remains a crucial episode in Trump's contentious approach to central banking and reflects his willingness to deviate from traditional presidential behavior to secure electoral success. Ultimately, the episode sheds light on the political underpinnings of monetary policy and the complex relationship between presidents and Fed chairs.

Go!