Can Trump Replace Jerome Powell Prematurely?

No – not under normal circumstances. The Fed Chair is appointed by the President for a four-year term.

(Powell's current term ends in May 2026. He can only be removed sooner for gross misconduct, neglect of duty, or illegal activity. Mere unwillingness to influence monetary policy according to the President's wishes or a difference of opinion is not grounds for dismissal. Trump seriously considered removing Powell in 2018–2019, but his legal advisors confirmed that he did not have the direct authority to simply "fire" him.)

Can Trump Still Influence the Fed His Way?

Yes, but indirectly and gradually:

The President can appoint new Board members when vacancies arise. By appointing "loyal" members, he can shift the balance of opinions, for example, towards a more accommodative policy.

If Powell does not complete his term, or after its conclusion, Trump can appoint a new Fed Chair.

Through political and media pressure. This can influence how members formulate communications and expectations.

Will This Affect the Fed's Behavior?

In the short term, probably not. The Fed continues to be guided by economic data, its inflation target (2%), and its mandate of independence.

In the long term, perhaps. If Trump remains President until 2028 and appoints new Board members + the Fed Chair, the style of the Fed's leadership could change.

How Many Positions Can Trump Directly Fill?

Realistically, Trump can appoint 2–4 new individuals between 2025–2029. This could influence:

The majority of the Board of Governors (up to 5 out of 7 members could be his choice).

A new Fed Chair in May 2026.

Consequence: Trump cannot fire anyone, but during his four-year term, he can realistically "rebuild" the Fed to his style – especially if Republicans also control the Senate (due to candidate confirmations). The core of the Fed could thus change from mid-2026.

Who Decides on Rates at Fed Meetings?

Interest rates in the US are not directly determined by the Board of Governors, but by the Federal Open Market Committee (FOMC).

There are a total of 12 voting members:

7 Governors from Washington

1 President of the NY Fed

4 Regional Presidents

Trump only has influence over the Governors, meaning a maximum of 7 out of 12. Regional Presidents are non-political positions.

Can Trump Appoint His Own Chair if Powell Resigns?

Yes, but the Senate must confirm a new Governor if they are not already at the Fed.

What Would This Mean for Monetary Policy?

A greater willingness to cut rates, weaker emphasis on inflation, and increased politicization of the Fed.

How Would Markets React?

Increased volatility, weakening of the dollar, and a possible rise in long-term yields.