Donald Trump said he has no intention of firing Federal Reserve Chair Jerome Powell if re-elected but called him a terrible leader. His statement comes after days of speculation triggered by leaked discussions and a reported draft termination letter.
Fed policy faces renewed political pressure
Speaking to reporters, Trump criticized the Fed’s decision to keep interest rates high. He said the central bank is hurting small businesses and the housing market while failing to manage inflation. Trump also blamed Powell for what he called uncontrolled Fed spending and questioned the integrity of recent financial decisions.
Despite that, he stated he does not plan to fire Powell unless fraud or misconduct is clearly proven. The remark refers to the ongoing investigation into a two point five billion dollar renovation of the Fed’s headquarters, which some Republicans say lacked transparency and exceeded budget limits.
Draft letter and private talks raise eyebrows
Reports from Washington confirm that Trump discussed Powell’s future with GOP allies and even reviewed a draft letter to remove him from office. Trump later dismissed the letter as hypothetical and unlikely to be used. Still, the news sent shockwaves through financial markets and raised new concerns about central bank independence.
Markets react to firing rumors
The US dollar dropped and Treasury yields jumped following the initial headlines. Equities fell briefly before stabilizing after Trump clarified his stance. Analysts warned that any attempt to remove Powell could damage the credibility of US monetary policy.
A long-running feud with deep roots
Although Trump appointed Powell in 2017, their relationship quickly soured. During his presidency, Trump repeatedly pressured the Fed to cut interest rates and boost asset purchases. His recent comments revive that tension and could shape future expectations for monetary policy under a possible second Trump term.
