Trump threatens to remove Fed Chair Powell amid tariff-inflation clash
3 Min Read
According to reports by the Wall Street Journal, the president has been privately weighing Powell's dismissal for months.
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President Donald Trump meets with Italy's Prime Minister Giorgia Meloni in the Oval Office of the White House, Thursday, April 17, 2025, in Washington (AP Photo/Alex Brandon)
US President Donald Trump has dramatically intensified his feud with Federal Reserve Chair Jerome Powell, threatening to remove him from office amid growing friction over interest rate policy and the economic fallout of the administration's aggressive tariff regime.
Speaking to reporters at the White House on Thursday, Trump said bluntly, "He'll leave if I ask him to," referring to Powell. "I'm not happy with him. I let him know it, and if I want him out, he'll be out of there real fast, believe me." The statement followed a post on Trump's Truth Social account in which he again called for Powell's removal, stating, "Termination… cannot come fast enough."
According to reports by the Wall Street Journal, the president has been privately weighing Powell's dismissal for months, discussing the idea during meetings at Mar-a-Lago with former Fed Governor Kevin Warsh. Although Trump does not have direct authority to fire the Fed Chair, he could attempt to remove Powell by demonstrating "cause," a legally and politically fraught process that would likely trigger major institutional pushback.
Tariff Tensions
The renewed hostility was sparked by Powell's remarks the day prior at the Economic Club of Chicago, where he warned that Trump's expansive tariffs could undermine the Federal Reserve's ability to balance inflation control with job growth. "Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said, and cautioned that the Fed could be pushed into a policy dilemma: "Policymakers could find themselves in the challenging scenario in which our dual-mandate goals are in tension."
Powell's warning comes on the heels of internal Fed concerns echoed by multiple central bank officials. Boston Fed President Susan Collins, St. Louis Fed President Alberto Musalem, and New York Fed President John Williams have each recently flagged inflationary risks stemming from Trump's tariff measures. Collins predicted inflationcould rise "well above" 3%, and Williams warned of GDP slowing to under 1% and unemployment climbing to 5% in the next year. Meanwhile, consumer confidence has declined sharply, with inflation expectations jumping to their highest levels since the early 1980s.
Despite these indicators, Trump has publicly pressed for rate cuts, criticizing Powell for not acting quickly enough and contrasting him with European Central Bank President Christine Lagarde, who recently oversaw a rate cut in the eurozone. "Too Late," Trump wrote, accusing Powell of falling behind global peers.
Lagarde responded with a show of support for the embattled Fed Chair, saying, "I have a lot of respect for my friend and esteemed colleague."
Read more: Tariff impact on Eurozone inflation to unravel over time: Lagarde
Democrats reacted strongly to Trump's threats, warning of the dangers of eroding central bank independence. Senate Majority Leader Chuck Schumer said on X, "An independent Fed is vital for a healthy economy — something that Trump has proved is not a priority for him."
Trump has previously suggested that the White House should have more influence over monetary policy, a stance that has reignited concerns over political interference in central banking.
