$BTC The White House said Trump is determined to fire Powell from the Fed at all costs.
Donald Trump wants Jerome Powell to leave, and the White House has officially made this decision. On Friday, his top economic advisor confirmed that removing the chair of the Federal Reserve is now a viable option.
"The president and his team will continue to study the issue," Kevin Hassett, head of the National Economic Council, said at a press conference when asked whether Powell's firing was up for discussion. That answer came after Trump's latest outburst just a day earlier when he publicly threatened to fire Powell.
Trump told reporters:
"I am not happy with him. I let him know that, and if I want him to go, he will go very quickly, believe me."
The president nominated Jerome Powell to lead the Fed during his first term. Since then, Powell has raised interest rates, defying Trump's demands and warning that the president's trade policies could harm the economy.
Currently, Federal Reserve governors are appointed for a 14-year term. The president cannot fire them. To legally oust Powell, Trump would have to prove "cause," which the law reserves for misconduct or gross failure.
Donald Trump with Jerome Powell. Official White House photo by Andrea Hanks (Via Flickr)
Trump tests legal limits as frustration with Fed leadership grows.
The Trump administration is actively seeking ways to bypass that rule. He has challenged similar restrictions in court. There is a lawsuit pending in the Supreme Court, in which Trump is trying to eliminate limits on the power to fire members of the National Labor Relations Board and the Merit Systems Protection Board.
If the court sides with him, this ruling could provide him with legal grounds to remove Powell. Powell himself mentioned the case in a speech at the Chicago Economic Club, stating that:
"That's a case that people talk about a lot. I don't think that decision would apply to the Fed, but I don't know. It's a situation we are watching closely."
In 2018, the Fed raised interest rates several times, angering Trump and prompting him to consider firing Powell at that time. That threat sent markets into a panic, but ultimately Trump backed down. Now he is doing it again, only this time he seems more serious and with fewer people trying to stop him.
Meanwhile, Treasury Secretary Scott Bessent warned insiders at the White House that firing Powell could destroy the financial markets. Two people with direct knowledge of internal conversations told reporters that Bessent conveyed that message multiple times.
But Trump is not listening. He is angry that Powell did not cut interest rates, and Trump thinks he should have done that a long time ago.
Behind the scenes, the president has discussed with others the possibility of replacing Powell before his four-year term ends in May 2026. He met with Kevin Warsh, a former Fed governor, at his Mar-a-Lago estate in Florida to discuss this possibility.
Warsh is said to have advised Trump not to intervene in Powell's term and warned him against firing the Fed chair. But that idea did not die there. Others close to Trump raised the issue of firing Powell as early as the beginning of March, according to a report from Wall Street.
