U.S. Federal Reserve Chair Jerome Powell and U.S. President Donald Trump.
Craig Hudson | Evelyn Hockstein | Reuters
Hours after President Donald Trump told a room full of Republican lawmakers that he will fire Federal Reserve Chair Jerome Powell, he denied plans to do that.
“We’re not planning on doing it,” he said. “It’s highly unlikely.”
Trump on Tuesday met with Republican lawmakers and asked them if they thought he would fire Powell. After receiving support, the president said he would follow through, according to a senior White House official.
“The President asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he likely will soon,” said the official, who spoke on the condition of anonymity to speak candidly on the issue.
Separately, the New York Times reported that Trump has gone so far as to draft a letter for firing Powell and showed it to lawmakers during that meeting.
A Fed official declined comment to CNBC on the report about the Trump meeting Tuesday, which came after Republicans blocked a procedural vote on crypto legislation that the president favors.
In prior statements on the matter, Powell has said his firing is “not permitted under the law.” No president ever has attempted to so in the past, though others have criticized prior central bank leaders.
Markets had only muted reaction to the news, with stocks turning flat and Treasury yields falling particularly on shorter duration issues.
Trump and other White House figures have launched a multi-pronged attack on Powell to push the central bank to lower its key borrowing rate. Most recently, they have blasted Powell over renovations to the Fed’s Washington headquarters, raising suspicion that Trump could try to remove the Fed leader for cause.
A recent Supreme Court decision indicated that the president does not have the authority to remove Fed officials at will.
In a CNBC interview Wednesday, Rep. French Hill, the chair of the House Financial Services Committee, repeated that “I don’t see” Trump firing Powell. Treasury Secretary Scott Bessent also told Bloomberg News on Tuesday that he didn’t expect Trump to move in that direction.
However, Rep. Anna Paulina Luna, a Florida Republican who on Tuesday joined with other party members in blocking the crypto initiative, said on social media site X that a move against Powell is forthcoming.
“Hearing Jerome Powell is getting fired! From a very serious source,” she said, later adding, “I’m 99% sure firing is imminent.”
Trump nominated Powell for the chair in November 2018 to succeed Janet Yellen, who went on to become Treasury secretary under former President Joe Biden after holding the Fed position for four years. The Senate confirmed Powell the following February, but has been the subject of frequent criticism from Trump both during the president’s first term and the second.
The Powell Fed has held interest rates steady after lowering them in late 2024. Trump has charged that Powell is politically motivated and only cut in 2024 to help the prospects of Democratic nominee Kamala Harris.
“That goes for his board too, because his board is not doing the job as they should,” Trump said Wednesday.
Trump appointed not only Powell but also governors Michelle Bowman, who now is the vice chair of bank supervision, and Christopher Waller. Over the past several weeks, both have indicated a willingness to start cutting as soon as the late-July meeting of the Federal Open Market Committee, though not at a pace that Trump is suggesting. The president has indicated he would like the Fed to lop up to 3 percentage points off the central bank’s overnight borrowing rate, which is currently targeted between 4.25%-4.5%.