US President Donald Trump has once again taken aim at Federal Reserve Chair Jerome Powell, signalling that he might remove him from the role if re-elected. Trump has long criticised Powell over interest rate hikes and now claims the top central banker is obstructing economic growth.
Who is Jerome Powell? Why does Trump want him gone?
Jerome Powell, who has led the US Federal Reserve since 2018, is a key figure in shaping the country’s monetary policy. Appointed by Trump himself, Powell was initially praised by the MAGA chief. However, their relationship soured when the Fed increased interest rates during Trump’s term in office.Trump argues that those rate hikes were unnecessary and blamed Powell for making it harder for Americans and businesses to borrow. Since launching his 2024 campaign, Trump has not backed down. He has floated the idea of firing Powell before his current term ends in 2026, suggesting he would replace him with someone more aligned with his economic agenda.“If he wins, he may fire Powell before his term ends in 2026,” Trump allies say. Trump believes a new Fed chair would favour lower rates and push for what he describes as a more “pro-growth” policy approach.Such a move would be controversial. The Federal Reserve is meant to operate independently of the White House, ensuring that political pressure does not influence interest rate decisions. Although the president nominates the Fed Chair, the law allows removal only “for cause,” meaning misconduct or neglect of duty, not policy disagreements.Financial experts warn that trying to dismiss Powell could shake investor confidence and disrupt financial markets. Trump, however, has insisted Powell’s decisions have hurt ordinary Americans. “We don’t do crimes and that’s what unites us,” Trump recently said while speaking about the broader need for national unity and law and order.Under Powell’s leadership, the Federal Reserve has raised interest rates to tackle high inflation, especially in the aftermath of the COVID-19 pandemic. While this strategy has brought inflation down, it has also increased borrowing costs, affecting homebuyers, credit card holders and small businesses.Powell, for his part, maintains that the Fed’s actions are driven by data, not politics. “But that’s not who we are. Rule of law unites us as Americans,” he said, defending the central bank’s role in maintaining long-term economic stability.Although some Republicans side with Trump and accuse Powell of overreach, many in the financial world support keeping the central bank free from political interference.
