In brief
US President Donald Trump has escalated his tensions with Federal Reserve Chair Jerome Powell, threatening to fire him if he does not step down by May. The dispute centers around Powell's reluctance to cut interest rates and ongoing investigations related to the Federal Reserve's renovation costs. Trump's comments come as Powell plans to stay on until his successor is confirmed, amidst threats from Senator Thom Tillis to block the new appointment unless certain investigations are dropped. This situation marks a significant point of contention leading into Powell's potential departure.
US President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step aside at the end of his term in May. The two have been embroiled in a bitter spat over Powell's reluctance to cut the central bank's interest rate, despite Trump's repeated calls.Powell's term expires on 15 May, but he plans to remain in post until his successor, Kevin Warsh, is confirmed by the Senate. Then I'll have to fire him, Trump told Fox Business, when asked about Powell's plans to stay on. Trump expressed frustration, stating, I've held back firing him. I've wanted to fire him, but I hate to be controversial.Moreover, Thom Tillis, an influential Republican senator overseeing nominations for the Federal Reserve chair, has threatened to block Warsh's confirmation. If Warsh is not confirmed before Powell's term expires, Powell plans to stay on temporarily in the post, citing legal requirements.Tillis has warned Trump he will not allow Warsh's appointment unless a criminal investigation into Powell, linked to the renovation of the Federal Reserve building, is dropped. Trump, hopeful that Tillis will ease his opposition, stated, He knows what to do. However, he clarified that he was not prepared to drop the investigation into Powell.Trump accused Powell of mishandling the Federal Reserve renovation, overspending billions on the project when he believed it could have been completed for tens of millions. He has previously criticized Powell's performance, branding him a 'knucklehead' for not adhering to his calls for interest rate cuts.As these discussions unfold, stock markets have shown volatility in response to Trump's comments about potentially firing Powell. If Trump were to follow through with such an action, it would break with longstanding precedent as no Federal Reserve chair has been fired in history. Powell was appointed by Trump in 2017 and later reappointed by Joe Biden in 2021.
