U.S. President Donald Trump has a problem he just can’t shake: getting himself into hot water all the time. Trump has long made clear that he doesn’t respect most traditional norms of government, and one of them is the historical independence of the Federal Reserve.
The Fed is statutorily independent and not meant to be influenced by political pressure. Therefore, most presidents have resisted getting into public spats with the Fed chairman.
Trump, during his first term, appointed Jerome Powell to a four-year term as Fed chairman, and Powell was reappointed by Joe Biden to a second term that runs through 2026. That hasn’t stopped Trump from sometimes being critical of the Fed chairman he chose.
At one point in 2020, Trump asked, “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
The occasional sniping has continued in Trump’s second term. This week, after Powell gave a speech in which he said Trump’s tariffs might lead to tension and conflicting timelines when it comes to the central bank’s mandates to boost growth and reduce inflation, Trump responded with a Truth Social post in which he ripped Powell for not making rate cuts, and mused about how he’s looking forward to Powell being gone.
Trump appears to miss the low-interest rate environment of the early part of his first term and would like to return to something like that.
But this is a textbook reason why there is such a thing as Fed independence: The Fed’s mandate is not, in fact, about making the current president happy or serving that president’s short-term political goals.
Donald Trump Says “Too Late”
In that post, Trump appeared to give Powell a nickname, “Too Late,” about Powell’s Fed not cutting interest rates when the European Central Bank has been doing so.
“Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now,” Trump said in the Thursday Truth Social post. “Powell’s termination cannot come fast enough!”
Powell, for his part, has said in the past that he would not resign if asked by Trump, while reiterating that the president cannot legally fire him. The specific language of “Powell’s termination” would seem to indicate that he’s threatening not to re-appoint Powell when his term expires in 2026. A senior White House official told CNBC Thursday that the Truth Social post “ should not be seen as a threat to fire Powell.”
There is also a case currently before the courts that would challenge Humphrey’s Executor v. United States, a 90-year-old Supreme Court decision that provided precedent for the independence of some federal agencies. But Powell has said that even if that case overturns the precedent, he doesn’t believe it would apply to the Fed.
But What If He Does?
Per Axios, a sequence of events would follow an attempt by Trump to fire Powell as Fed Chairman. It would almost certainly lead to a court fight that may very well go to the Supreme Court. In the meantime, Powell would likely remain as a member of the Fed Board of Governors.
Per the Brookings Institution, Powell could resign, or he could sue for clarity.
(Also, technically, Powell holds three different jobs: He is a member of the Board of Governors, Chair of that Board of Governors, and chair of the Federal Open Market Committee, known as the FOMC.)
After Trump’s Truth Social post on Thursday, in an interview on CNBC, Sen. Elizabeth Warren (D-MA) predicted that a market crash would follow any attempt by Trump to fire Chairman Powell. And Warren, the ranking member on the Senate Banking Committee, has often herself been critical of Powell.
“I have tangled with [Powell] regularly about both regulations and interest rates,” Warren said on the CNBC interview, from the floor of the New York Stock Exchange. “But understand this: If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States.”
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter
