The ongoing conflict between President Donald Trump and Federal Reserve Chair Jerome Powell has intensified, raising concerns about the independence of the Federal Reserve and potential economic ramifications.CBS News+6Reuters+6Time+6
🔥 The Conflict: Trump vs. Powell
President Trump has publicly criticized Chair Powell for not reducing interest rates, accusing the Federal Reserve of political bias. Trump asserts that he has the authority to remove Powell, stating that his "termination cannot come fast enough" . This dispute has escalated as the Federal Reserve maintains higher interest rates to combat inflation, partly attributed to Trump's own tariff policies .AP News+2AP News+2Reuters+2YouTube+12Business Insider+12CBS News+12Time
⚖️ Legal Considerations
The Federal Reserve Act stipulates that a Fed Chair can only be removed "for cause," typically interpreted as misconduct or incapacity, not policy disagreements. Historically, no Fed Chair has been dismissed by a President. Currently, the Supreme Court is reviewing a case that could redefine the President's authority over independent agencies, potentially impacting the Federal Reserve's autonomy .YouTube+2Time+2AP News+2
🧑💼 Potential Successor: Kevin Warsh
Reports indicate that President Trump is considering Kevin Warsh, a former Federal Reserve governor and Morgan Stanley banker, as a potential replacement for Powell. Warsh, who has previously advised against prematurely dismissing Powell, has not publicly confirmed his interest in the position .Business Insider+1Time+1