US President Donald Trump is weighing the possibility of firing Federal Reserve Chair Jerome Powell, even as a decision on the next head of the central bank draws closer, according to people familiar with the matter. The renewed uncertainty has unsettled markets and raised fresh questions about the future independence of the US Federal Reserve.
Trump, who has repeatedly criticised Powell for maintaining high interest rates, has in recent weeks intensified private discussions about reshaping the Fed’s leadership if he returns to the White House. While advisers remain divided over whether a sitting Fed chair can be removed before the end of his term, Trump has continued to signal frustration with Powell’s handling of monetary policy, particularly its impact on growth and borrowing costs.
Powell’s current term as chair runs until May 2026. Under US law, a Fed chair can only be removed “for cause,” a provision traditionally interpreted as protecting the central bank from political interference. Any attempt to dismiss Powell could trigger legal challenges and deepen concerns about political pressure on monetary policy.
Trump is also considering potential successors, with discussions focusing on candidates who would be more aligned with his preference for lower interest rates and looser financial conditions. However, no final decision has been made, and advisers have cautioned that an aggressive move against Powell could provoke market volatility and undermine investor confidence.
Trump has long blamed the Federal Reserve for slowing the US economy, accusing Powell of acting too cautiously and failing to support growth during his presidency. Powell, for his part, has consistently defended the Fed’s independence, stating that policy decisions are driven solely by economic data and the mandate to control inflation and support employment.
Financial markets reacted nervously to reports of Trump’s deliberations, with analysts warning that any perception of political interference in the Fed could weaken the dollar and push up bond yields. “The credibility of the Federal Reserve rests heavily on its independence,” said a senior economist at a Washington-based think tank. “Any move to remove a chair for policy disagreements would be unprecedented.”
As Trump edges closer to a decision on the next Fed chair, the debate over Powell’s future underscores broader tensions between political leadership and central bank autonomy—an issue likely to remain in sharp focus in the months ahead.
