Could Trump actually fire head of the U.S. central bank, Jerome Powell? | CBC News (2025)

U.S. President Donald Trump on Mondaykept up his verbal attacks on Federal Reserve Chair JeromePowell over the Fed's refusal for now to further cut interestrates.

On social media, the president referenced Powell when he said a slowdown would be coming to the U.S. economy unless "Mr. Too Late,a major loser, lowers interest rates, now."

This comes after Trump said Powell's termination "cannot come fast enough" in another Truth Social post last week.

While the Federal Reserve — the U.S. government's central bank—is an independent body, Trump has been pressuring it to lower interest rates.

Many economists saythe rising attacks on Powell are increasing fearthat Trump may ultimately try to fire the U.S. central bank chief. That fear contributed largely to the slump in financial markets yesterday, experts added.

TheS&P 500 sank 2.4 per cent yesterday, the Dow Jones Industrial Average dropped 2.5 per cent and the Nasdaq fell 2.6 per cent to end another turbulent day on Wall Street.

WATCH |Trump suggests he can remove U.S. Fed Chair Jerome Powell:

A move by Trump to fire Powell would likely send a bolt of fear through financial markets. While Wall Street loves lower rates, largely because they boost stock prices, the bigger worry would be that a less independent Fed wouldn't be as effective at keeping inflation under control. Experts worry that such a move could further weaken, if not kill, the United States' reputation as the world's safest place to keep cash.

Powell was first nominated by Trump in 2017 and then appointed for anotherterm in 2021 under Biden's administration. His term as chair doesn't end for another year or so, inMay 2026.

But how much power does the president actually have to get rid of Powell? Here's what we know.

Can Trump fire Powell?

Whether Trump has the authority to do so is unclear.

The Federal Reserve Act of 1913 establishing the Fedstipulates that members of its Board of Governors, appointed bythe president and confirmed by the Senate to staggered 14-yearterms, can be only be removed for "cause" — long thought to meanmisconduct, not policy disagreement.

That said, the law omits reference to limits on removal fromits description of the four-year term of the Fed chair, who isone of the seven governors.

Has this happened before?

There is no direct legal precedent, since no president hasever tried to fire a Fed chief.

There are, however, lawsuits nowworking their way through the courts over unrelated firings byTrump. Those are being watched as possible proxies for whether he has thatpower.

One is currently pending before the Supreme Court, whereany attempt to fire Powell would almost certainly end up.

What would firing Powell mean in practical terms?

A lot would hinge on just how Trump might choose to "fire"the Fed chief.

As each of his predecessors has done, Powell holds threeroles — chair of the Federal Reserve System, member of the Boardof Governors and chair of the Fed's interest-rate-settingFederal Open Market Committee (FOMC).

Can Trump oust him just as Fed chair?

If Trump were to try to remove Powell only as chair of the Fedsystem, Powell could remain a governor until that term expiresat the end of January 2028. The next scheduled board vacancydoes not occur until January 2026, which in the meantime would only leave Trump the option of nominating one of the othergovernors to be chair.

Two of those other six wereappointed by Trump in his first term —governors ChristopherWaller and Michelle Bowman. Trump recently nominated Bowman asvice chair for bank oversight.

Both, like Powell, have spokenabout the importance of Fed independence, so it's not clear thateither would deliver immediate rate cuts like Trump wants.

LISTEN | What did Trump just do to the economy?:

What about removing him as FOMC head?

Trump has no direct control over who heads the FOMC. TheFOMC chair is chosen annually by the panel's 12 members — theseven governors, the president of the Federal Reserve Bank ofNew York and four of the other regional bank presidents, whoserve on the panel on a rotating basis.

By tradition the FOMC chooses the Fed chair as its head, with the New York Fed president as its vice chair. In theory, though, they could choose any of the members, including Powell if he were to still be a governor.

And what about firing himas a governor?

Removing Powell as a governor would have the largest impact.

Were it to withstand legal challenge, it would give Trump both aboard vacancy and chair vacancy to fill with a nominee of hisown choosing. It would also open the door to Trump firing asmany of the other governors as he pleased to install a wider Fedleadership he saw as compliant with his wishes.

Would Powell be able to challenge it?

If it were to happen, Powell would have the standing to challengehis firing in federal court, but he would have to fund thateffort with personal resources. A lawyer and former privateequity leader, he likely has the personal wealth to finance such aneffort.

When asked in November of last year whether he'd leave if Trump asked him to step down, Powell said in no uncertain terms, "No."

WATCH | U.S. Fed's Powell says he wouldn't resign if Trump asked:

Powell has also said repeatedly that he believes his removal isnot allowed under the law, and said more recently that he doesnot believe the cases working their way through the courts nowover Trump's firing of other independent federal board andagency members will apply to the Fed.

Will it actually happen?

The Wall Street Journal reported last weekthat Trump hasdiscussed firing Powell and replacing him with Kevin Warsh, whoserved as a Fed governor between 2006 and 2011. Warsh, the papersaid, has advised against that, advocating that Trump shouldallow Powell to remain until his term as Fed chair expires inMay 2026.

Last week, White House economic adviser Kevin Hassett, also seen as a potential replacement to Powell, said the matter was the subject of ongoing study inside the administration.