Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step aside at the end of his term in May, intensifying a long-running dispute over U.S. monetary policy.
Speaking in an interview with Fox Business, Trump said that while he has “held back” from firing Powell, he would consider doing so if Powell does not leave office as planned. The Federal Reserve chair’s term is set to expire on May 15, but he has indicated he may remain in the role until a successor is confirmed.
Trump has repeatedly criticized Powell for not cutting interest rates, accusing him of mismanaging monetary policy and, at times, labeling him a “knucklehead.” The dispute has added political tension around the traditionally independent central bank.
Powell has maintained that he will remain in post as required under law until a successor is fully confirmed by the Senate. The leading candidate for the role is Kevin Warsh, a former Federal Reserve official whose confirmation has become politically contested.
The nomination process has become further complicated by opposition from influential Republican Senator Thom Tillis, who has threatened to block Warsh’s confirmation unless a separate criminal investigation related to renovations at the Federal Reserve building is dropped.
Trump has resisted calls to halt the investigation, insisting there must be accountability over alleged spending issues tied to the renovation project.
Treasury Secretary Scott Bessent said he remains optimistic Warsh will be confirmed before Powell’s term expires, signaling the administration’s confidence in securing Senate approval.
Any move to remove a sitting Federal Reserve chair would mark a significant break from long-standing precedent, as the central bank is designed to operate independently from political pressure. Financial markets have previously reacted negatively to uncertainty surrounding Powell’s position and Federal Reserve leadership stability.
The standoff underscores ongoing tensions between the White House and the central bank over inflation policy, interest rates, and economic direction ahead of a politically sensitive period.
