Former President Donald Trump is intensifying his confrontation with Federal Reserve Chair Jerome Powell, demanding his immediate resignation. In a bold statement on his Truth Social platform, Trump exclaimed, "'Too Late' should resign immediately!!!" This remark comes on the heels of criticism directed at Powell regarding his testimony to Congress about the central bank's renovations, prompting discussions of an investigation into his actions.
Trump, who originally nominated Powell during his presidency, has increasingly vocalized his displeasure with Powell's decision not to cut interest rates, yet it's uncertain if Trump has the legal authority to remove him. Despite previous assertions of no intention to dismiss the Fed chair, Trump's call for resignation signals a shift in rhetoric as he pushes for policies he believes would invigorate economic growth.
Recently, Powell indicated that the Federal Reserve would have had more flexibility in reducing rates if not for the repercussions of tariffs initiated during Trump's tenure. When asked about the current economic climate at a central bankers' meeting in Portugal, Powell acknowledged that administration policies affected the Fed's decisions, reinforcing the notion that several factors weigh into monetary policy.
The Federal Reserve has refrained from commenting on Trump's latest demands. Powell's term, having been renominated by President Joe Biden, is set to expire in May 2026. Additionally, Powell has asserted his intention to remain in office regardless of political pressures, citing legal protections that prevent arbitrary dismissal of independent regulatory agency heads "for cause," a principle upheld by a pivotal Supreme Court ruling in 1935.
Further developments emerged when Bill Pulte, director of the Federal Housing Finance Agency, voiced his call for congressional investigation into Powell, which aligns with Trump's escalating criticism. Powell contended last week that allegations of excessive costs related to the Fed's headquarters had been misrepresented.
As the political landscape continues to evolve, the tension between Trump and Powell underscores broader debates surrounding economic policy and regulatory independence.
