As of April 2025, former U.S. President Donald Trump has intensified his criticism of Jerome Powell, the Chairman of the Federal Reserve. Trump accuses Powell of failing to lower interest rates as he believes inflation is already under control. He called Powell's tenure a "disaster" and has openly expressed his desire to remove him from office.
Powell, in response, emphasized the independence of the Federal Reserve and noted that removal from office is only possible for cause. He argues that current interest rates are necessary to manage inflation—particularly in light of high tariffs on Chinese imports introduced during Trump’s presidency, which could further drive up consumer prices.
The legal framework regarding Powell’s potential removal is complex. According to the Federal Reserve Act, board members can only be dismissed “for cause,” which usually requires serious misconduct. Political disagreements alone are not sufficient grounds for dismissal.
Should Trump win the upcoming presidential election, he reportedly plans not to reappoint Powell for another term. A likely successor could be Kevin Warsh, a former Fed board member known for his loyalty to Trump.
Experts warn that politically motivated interference in the Federal Reserve could damage trust in the central bank’s independence and jeopardize economic stability. Such a move might lead to rising inflation expectations and increased market volatility.
The next decision on interest rates is expected in May. It remains to be seen whether the Federal Reserve will maintain its independent course or yield to political pressure.