President Donald Trump dialed back recent threats to remove Federal Reserve Chair Jerome Powell, telling reporters Tuesday, “I have no intention of firing him.” The statement follows a series of critical remarks aimed at Powell, including a recent post on Trump’s social media platform that read, “Powell’s termination cannot come fast enough.” Despite the harsh rhetoric, Trump clarified, “I never did” plan to dismiss Powell, whose term as Fed Chair runs through May 2026.
Trump Claims He Never Planned to Fire Jerome Powell
“The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.” The shift in tone comes after a week of heightened tension between Trump and the Fed, sparked by Powell’s comments that the president’s trade policies could push inflation higher while slowing economic growth. The Fed held interest rates steady last week, frustrating Trump’s push for a more aggressive easing stance. “I’m not happy with him,” Trump told reporters on Friday. “I let him know it, and if I want him out, he’ll be out of there real fast, believe me.”
His top economic adviser, Kevin Hassett, added that the administration was exploring whether it could legally remove Powell. Trump intensified pressure again when he labeled Powell a “major loser” on Truth Social and warning that economic momentum could stall unless rates come down soon. “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump posted, urging “Preemptive Cuts.” The push drew criticism from Capitol Hill, where Sen. John Kennedy (R – LA.) pushed back on the president’s remarks. “I don’t think the president, any president, has the right to remove the Federal Reserve chair,” Kennedy said, stressing the need for an independent central bank. Markets reacted negatively to the escalating rhetoric, with stocks sliding on Monday amid renewed fears over the Fed’s autonomy.
Fed Chair Stands On Business
Powell, for his part, has remained firm. He stated last week that he plans to serve out his full term and dismissed concerns that a pending Supreme Court case would impact the Fed. “I don’t think that’s a case that will apply to the Fed,” Powell said, though he acknowledged the central bank is watching developments closely. Other Fed officials echoed Powell’s stance. Minneapolis Fed President Neel Kashkari emphasized that independence from political interference is “the foundation for a strong economy.” He also noted it’s still too early to determine the direction of future rate moves.
Meanwhile, Fed Governor Adriana Kugler signaled caution in the face of rising inflation risks. “I will support maintaining the current policy rate for as long as these upside risks to inflation continue, while economic activity and employment remain stable,” she said. Kugler added that this year’s increase in tariffs is likely to fuel inflation, and she’s closely monitoring both inflationary pressures and potential labor market fallout. “The economy is facing heightened uncertainty,” she said. “If financial conditions were to tighten persistently, that could weigh on growth in the future.”
Featured Image Credit: Wendy Maxwell; Pexels: Thank You!
