#PowellVsTrump What’s Driving the Clash?

1. Interest Rate Dispute

Trump, pushing for rate cuts to around 1%, vents frustration over Fed’s 4.25–4.50% rates, accusing Powell of stifling the housing market and inflating U.S. debt costs .

Powell, on the other hand, argues caution is necessary due to inflation pressures—partly from Trump’s own tariffs—and economic uncertainty .

2. Renovation Scandal

Trump has seized on the Fed’s $2.5 billion renovation of its DC headquarters (initially budgeted at $1.9B) as evidence of mismanagement, calling it “disgraceful” and possibly grounds for firing Powell .

Powell defended the costs, stating no luxury enhancements were added and that overruns were due to essential safety/compliance work .

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⚖️ Can Trump Fire Powell?

Legally, a Fed Chair can only be removed “for cause”—e.g. fraud or malfeasance—not just policy disagreement. Courts and experts say Trump’s move would likely fail in court .

Trump himself later walked back his threats—calling a firing “highly unlikely” unless fraud is proven .

Some GOP senators and lawmakers caution that such a move would undermine market confidence and the Fed’s independence .