NAIROBI, Kenya- Donald Trump has threatened to fire Jerome Powell if he does not step aside when his term expires in May, escalating a high-stakes clash over US monetary policy.
The warning comes amid a growing standoff over interest rates and a political battle in the Senate over Powell’s potential successor.
How the Trump–Powell feud over interest rates escalated
Trump has repeatedly pushed the Federal Reserve to cut interest rates, arguing it would boost the economy.
Powell has resisted those calls, maintaining a cautious approach amid inflation and economic uncertainty.
Frustrated by the stance, Trump said he had “held back” from firing Powell but could act if the Fed chair remains in office beyond his term.
Senate standoff threatens smooth transition to Kevin Warsh
Powell’s term ends on May 15, but he plans to stay until a successor is confirmed.
That transition is now uncertain, with Republican senator Thom Tillis threatening to block the confirmation of Kevin Warsh.
Tillis has linked his opposition to an ongoing investigation into renovations at the Federal Reserve, adding a new layer of political tension.
Meanwhile, Senate Majority Leader John Thune has urged for the probe to be concluded, signaling divisions within Trump’s own political base.
Why firing a Fed chair would be unprecedented
If Trump follows through, it would mark the first time a US president has fired a Federal Reserve chair, breaking long-standing norms around central bank independence.
Markets have previously reacted negatively to such threats, with both stocks and the dollar dipping when the idea surfaced in 2025.
Despite the pressure, Powell has indicated he will follow legal precedent by remaining in office until a successor is confirmed.
The standoff now raises broader questions about political influence over monetary policy and the stability of the US financial system.