Trump Threatens to Remove Fed Chair Jerome Powell Amid Leadership Tensions

Washington D.C. | U.S. President Donald Trump has warned Federal Reserve Chair Jerome Powell that he will be forcibly removed if he does not step down from his position.

Powell's term as Chair expires on May 15. Trump stated that even after his term as Chair ends, he will dismiss Powell if he does not resign from the Fed's Board of Governors. In an interview with Fox Business, Trump mentioned that while he had previously wanted to remove Powell but refrained to avoid controversy, he now signaled that he would take action if necessary, complicating the leadership transition process within the U.S. central bank.

Meanwhile, an ongoing investigation into Powell could potentially impact the confirmation process of Kevin Warsh, the candidate proposed by Trump for the position.

This investigation, led by District of Columbia Attorney General Jeanine Pirro, focuses on expenditures related to the Fed's building construction project in Washington. Analysts suggest that if Powell remains on the board, a balance of power will be maintained within the Fed; however, if he is removed and a new member is appointed, it would be easier for the Trump administration to exert greater influence over monetary policy.

Currently, some members of the seven-member Fed board were appointed by former President Joe Biden, while Powell himself was appointed during Trump's first term. Nevertheless, he has operated independently and resisted Trump's pressure to lower interest rates.

On the other hand, Republican Senator Thom Tillis has criticized the investigation into Powell, calling it an attack on the Fed's independence. He has threatened to block Warsh's appointment until this issue is resolved.

Trump, however, has supported Warsh, presenting him as a candidate capable of lowering interest rates.

Meanwhile, U.S. Treasury Secretary Scott Bessent has expressed confidence that Warsh will be confirmed in a timely manner. Powell has clarified that he has no plans to leave the Fed board until the investigation is completed. He has also signaled that he may remain in his position until 2028 if necessary.