Trump reignites feud with Fed Chair Powell, considers removal

White House economic adviser Kevin Hassett confirmed on April 18 that President Trump and his team are actively considering whether to remove Federal Reserve Chair Jerome Powell, keeping the issue under review.

“The president and his team will continue to study that matter,” Hassett stated when asked if firing Powell was now a viable option, Caliber.Az reports via US media.

This came after Trump escalated his long-standing feud with Powell, accusing him of "playing politics" by refusing to cut interest rates. Trump again criticised Powell, saying, “If we had a Fed chairman who understood what he was doing, interest rates would be coming down. He should bring them down.”

Hassett’s comments marked a shift from his previous stance, where in his 2021 book, The Drift: Stopping America’s Slide to Socialism, he argued that firing Powell during Trump’s first term would have undermined the Fed’s reputation as an independent entity. This, he believed, could have damaged the credibility of the dollar and caused a stock market crash. However, Hassett now explained, "The market was a completely different place back then. I was referring to the legal analysis we had at that time, and if there’s new legal analysis that says something different, we need to rethink our response." He did not clarify what new legal analysis he was referring to, though legal experts are closely watching a case involving Trump’s authority to remove federal officials.

Powell, who was first appointed to the Fed by President Barack Obama and later elevated to chair by Trump, has consistently stated that he cannot be removed by the president. He has expressed his intention to serve through the end of his term in May 2026. Powell also commented that the ongoing case before the Supreme Court, dealing with whether Trump overstepped his authority in removing certain federal officials, is unlikely to apply to his situation at the Fed.

The renewed tensions with Powell come as the Fed has voiced concerns over Trump’s trade policies, particularly his tariffs, which they believe could harm the economy by pushing inflation up while slowing growth and hurting job markets. Trump has blamed Powell for not cutting rates, further fanning the flames of their conflict. On April 17, Trump declared, “The Fed really owes it to the American people to get interest rates down. That’s the only thing he’s good for,” and added, “I am not happy with him. If I want him out of there, he’ll be out real fast.”

The ongoing dispute is drawing significant attention from economists and investors, who are concerned about the potential implications for the Fed’s independence. As the world’s most powerful central bank, the Fed’s ability to act without political interference is considered crucial to maintaining global market stability. A move to fire Powell could worsen market volatility, which has already been exacerbated by Trump’s erratic approach to tariffs, including delays, rollbacks, and escalations in trade relations with China.

Evercore ISI Vice Chair Krishna Guha warned that any move to remove Powell could escalate market stress and shift it toward a stagflationary direction, with heightened risks of economic instability.

By Tamilla Hasanova