U.S. President Donald Trump has reignited tensions with Federal Reserve Chair Jerome Powell, claiming he could "force out" the central bank leader amid disagreements over interest rates and trade policies. The remarks, made during a White House press briefing on Thursday, followed Powell’s warning that Trump’s tariff-heavy trade strategy risks complicating the Fed’s inflation-management efforts.
"I’m not happy with him. If I want him out, he’ll be out real fast," Trump told reporters, doubling down on a Truth Social post demanding Powell’s "termination." Sources familiar with private discussions told the Wall Street Journal that Trump has privately debated ousting Powell for months but has yet to act.
Federal Reserve governors, including the chair, cannot be removed without demonstrating legal "cause," a high bar under U.S. law. Powell, appointed by Trump in 2018, has repeatedly pledged to serve his full term through 2026 despite the public criticism. "I fully intend to serve all of my term," he affirmed in a speech earlier this month.
The clash comes as Trump’s proposed tariffs on global trade partners threaten to reignite inflationary pressures, potentially forcing the Fed to balance economic growth with price stability. Markets remain uneasy: CME Group data suggests a two-thirds chance the Fed will maintain rates at their current 4.25-4.5% range in May.
Analysts warn that politicizing Fed decisions could destabilize the U.S. dollar’s credibility. With global inflation easing to 2.4% in March — nearing the Fed’s 2% target — Powell emphasized a cautious approach to rate cuts. Meanwhile, Trump’s calls for immediate reductions mirror moves by the European Central Bank, which trimmed its benchmark rate this week.
International investors and Asian exporters are closely monitoring the feud, as prolonged U.S. policy uncertainty could ripple through supply chains and currency markets. The Fed’s next meeting in May may prove pivotal for both Wall Street and emerging economies reliant on stable trade flows.
