International

President Trump says he has no plans to fire Fed Chairman Jerome Powell

Hoang Bach April 23, 2025 11:23

US President Donald Trump's recent criticism of Jerome H. Powell, Chairman of the US Federal Reserve (Fed), for his "delay" in lowering interest rates has raised questions about Mr. Powell's fate.

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US Federal Reserve Chairman Jerome H. Powell. Photo: The New York Times

According to The New York Times, President Trump said on April 22 that he has “no intention” of firing Federal Reserve Chairman Jerome H. Powell, although he continues to call on the central bank to lower interest rates. President Trump made the above statement at an event at the White House.

The possibility that Mr. Trump might seek to interfere with the Fed — an organization that is politically independent — has spooked financial markets in recent days, leading to a wave of selloffs in stocks, government bonds and the US dollar.

Mr Trump’s advisers have repeatedly warned that firing Mr Powell would cause both legal and financial problems – and that the uncertainty could cause a major shock to markets.

At least for now, Mr. Trump seems to be convinced, according to information from The New York Times last week.

The US President's anger at Mr. Powell stems from his desire for the Fed to quickly lower interest rates, while the central bank has so far been hesitant to do so.

In a speech last week, Mr. Powell warned that tariffs imposed by Mr. Trump were likely to push up U.S. inflation and slow economic growth more than the Fed initially anticipated. Mr. Powell’s insistence that the Fed has an “obligation” to ensure price pressures do not turn into a sustained inflation problem suggests that the threshold for the central bank to act on interest rates remains high.

Those comments sparked a furor from Mr. Trump, including his suggestion that he might fire the Fed chairman. On April 21, Mr. Trump continued to call for lower interest rates, asserting that in the U.S. there is “almost no inflation” and that the cost of energy and “almost everything else” is falling.

“With costs coming down so well - just as I predicted - there is virtually no chance of inflation, but there could be a slowdown if Mr. Too Late, a loser, does not lower rates now,” Mr. Trump wrote on social media, referring to Mr. Powell.

On April 22, Mr. Trump continued to emphasize this message, saying that now is the “perfect time” for the Fed to act.

While Mr. Trump’s latest statements have helped ease some of the immediate concerns about Mr. Powell’s fate, his administration is still testing its ability to challenge the legal mechanisms that protect the Fed’s political independence.

The US Supreme Court is expected to consider a case involving the president's power to remove officials from independent agencies. The court's ruling could set a precedent that could affect the Fed.

For his part, Mr. Powell has so far steadfastly defended the independence of the agency he heads, arguing that it is a “legal matter.”

Hoang Bach