Trump Ready to Fire Powell, Fed on the Verge of a Political Coup!
The relationship between US President Donald Trump and Federal Reserve Chairman Jerome Powell has once again come under scrutiny. Tensions have escalated sharply after Trump launched a scathing critique of the Fed's interest rate policy and openly considered firing Powell before his term ends in May 2026.
President Trump accused Powell of being "too slow" in lowering interest rates, which he said was hampering US economic growth. He suggested that interest rates should have fallen "more than 3%" by early 2025, claiming that Powell had not responded quickly enough to easing inflationary pressures and the global economic slowdown.
Furthermore, Trump also attacked the $2.5 billion Federal Reserve headquarters renovation project, accusing it of being an unconscionable waste, and used the issue as a moral and political basis to pressure Powell to resign voluntarily.
Can Trump Fire Powell?
Legally, a Fed Chairman can only be fired for "cause," such as a violation of law or gross negligence. Some legal experts believe Trump's accusations do not meet these requirements.
However, Trump has hinted at the possibility of legal action or even an executive order. This sparked concerns that the Federal Reserve's independence—a principle cherished since the 1950s—could be seriously threatened.
Market Reaction
Long-term US bond yields rose, reflecting concerns over inflation and monetary policy uncertainty.
Gold prices and other safe-haven assets surged, as investors sought protection from potential monetary turmoil.
Volatility increased in the stock market, particularly in the financial and property sectors.
Potential Replacements
US Treasury Secretary Scott Bessent confirmed that the formal process for finding Powell's successor had begun as a precautionary measure. However, Trump continued to state, "I like the job he's doing now," leaving an ambiguous signal regarding his next steps.
Some names mentioned as potential replacements for Powell include:
Scott Bessent himself (a Trump loyalist and former hedge fund advisor)
Judy Shelton, a pro-Trump conservative economist
Kevin Warsh, a former Fed Governor. (mrv)
Source: Newsmaker.id
