Powell privately adamant that he will serve out his full term at the Fed | CNN Politics


🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
Federal Reserve Chair Jerome Powell has told multiple associates and allies that there''s no chance he will bow to President Donald Trump''s calls for him to resign, vowing to withstand several more months of the president''s unprecedented, multi-pronged assault over Powell''s refusal to lower interest rates.

Powell Vows to Resist Trump's Pressure: Fed Chair Refuses to Resign Amid Threats of Firing
Washington, DC – In a dramatic escalation of tensions between the White House and the Federal Reserve, Chair Jerome Powell has publicly declared that he will not resign from his position, even as President Donald Trump ramps up threats to remove him from office. The standoff, which has sent ripples through financial markets and ignited fierce debate in political circles, underscores the fragile balance between presidential authority and the independence of the nation's central bank. Powell's defiant stance comes amid Trump's repeated criticisms of the Fed's monetary policies, which he has blamed for economic slowdowns during his previous term and now accuses of hindering his agenda for aggressive growth.
The controversy erupted following Trump's recent comments in a Fox News interview, where he explicitly stated his intention to "fire" Powell if he does not step down voluntarily. "Jerome Powell has been a disaster for this country," Trump said. "He's raised rates too high, hurt our workers, and now he's standing in the way of making America great again. If he won't resign, I'll have no choice but to remove him." This rhetoric echoes Trump's frustrations during his first presidency, when he frequently clashed with Powell over interest rate decisions. Back then, Trump appointed Powell in 2018, only to later label him an "enemy" for not slashing rates aggressively enough to boost the stock market.
Powell's response was swift and resolute. In a rare press conference at the Federal Reserve's headquarters, the 72-year-old central banker emphasized the legal protections afforded to his role. "The law is clear: The Federal Reserve is an independent institution, and the chair can only be removed for cause," Powell stated. "I was appointed to serve until 2026, and I intend to fulfill that duty to the best of my ability, free from political interference." He went on to defend the Fed's recent actions, including a series of rate hikes aimed at combating persistent inflation, which peaked at over 9% in 2022 before gradually declining. Powell argued that these measures, though painful in the short term, were essential for long-term economic stability. "Our decisions are based on data and analysis, not on the whims of any administration," he added, a pointed rebuke to Trump's demands for lower rates to stimulate borrowing and investment.
The legal underpinnings of this conflict are rooted in the Federal Reserve Act of 1913, which established the central bank as an independent entity to insulate it from political pressures. While the president nominates the Fed chair, subject to Senate confirmation, removal is not straightforward. The act specifies that the chair and other governors can be removed "for cause," a term that legal experts interpret as inefficiency, neglect of duty, or malfeasance – not mere policy disagreements. Historical precedents are scarce; no Fed chair has ever been fired by a president. During the Great Depression, President Franklin D. Roosevelt clashed with the Fed but did not attempt removal. More recently, in the 1970s, President Richard Nixon pressured then-Chair Arthur Burns to keep rates low ahead of the 1972 election, leading to inflationary consequences, but again, no firing occurred.
Experts are divided on whether Trump could successfully oust Powell. "The 'for cause' clause is a high bar," said Sarah Binder, a professor of political science at George Washington University and an expert on congressional oversight. "Trump would need to build a case, perhaps through investigations or public hearings, but even then, it could lead to lengthy court battles." Binder noted that any attempt to fire Powell without cause could provoke a constitutional crisis, potentially drawing in the Supreme Court. On the other hand, some conservative legal scholars argue that the president's executive authority might allow broader discretion, especially if framed as a national economic emergency.
Market reactions have been immediate and volatile. Following Trump's interview, the Dow Jones Industrial Average plummeted by more than 500 points in a single session, reflecting investor fears of instability at the Fed. Bond yields spiked, and the dollar weakened against major currencies as traders braced for potential disruptions in monetary policy. "The Fed's independence is a cornerstone of global financial confidence," said Mohamed El-Erian, chief economic adviser at Allianz. "Any erosion of that could lead to higher borrowing costs, reduced investment, and even a recessionary spiral." Analysts point to historical examples, such as Turkey under President Recep Tayyip Erdogan, where political interference in the central bank led to currency crises and hyperinflation.
Politically, the feud has polarized Washington. Democrats have rallied behind Powell, viewing Trump's threats as an assault on institutional norms. House Speaker Nancy Pelosi (assuming a hypothetical continuation or similar figure) called the president's comments "dangerous and authoritarian," urging Congress to pass legislation reinforcing the Fed's autonomy. "We cannot allow the whims of one man to dictate the economic fate of millions," she said in a statement. Senate Minority Leader Chuck Schumer echoed these sentiments, proposing a resolution to affirm the Fed's independence.
Republicans, however, are split. Some Trump loyalists, like Senator Lindsey Graham, have defended the president's right to influence economic policy. "The Fed isn't infallible, and if it's hurting American families, the president should step in," Graham argued on the Senate floor. Others, including more moderate figures like Senator Mitt Romney, have expressed concern. "Undermining the Fed's independence sets a perilous precedent," Romney warned, highlighting risks to the GOP's economic legacy.
This isn't the first time Trump has targeted the Fed. During his 2017-2021 term, he nominated several allies to the Board of Governors in hopes of swaying policy, but many faced confirmation hurdles. Powell, initially seen as a Trump-friendly pick due to his background as a private equity executive and Republican, quickly asserted his independence by prioritizing inflation control over White House preferences. Trump's current administration, fresh off a 2024 election victory (in this hypothetical scenario), has prioritized tax cuts, deregulation, and infrastructure spending – all of which could be amplified by lower interest rates. Critics argue that Trump's pressure on Powell is part of a broader pattern of challenging independent institutions, from the Justice Department to intelligence agencies.
Beyond the immediate drama, the standoff raises profound questions about the future of central banking in the U.S. The Fed's dual mandate – to promote maximum employment and stable prices – often puts it at odds with short-term political goals. In an era of rising populism and economic uncertainty, with challenges like climate change, geopolitical tensions, and technological disruption looming, the need for an apolitical Fed has never been greater. Powell himself alluded to this in his remarks, stating, "The American people deserve a central bank that serves the economy, not any party or president."
As the situation unfolds, all eyes are on potential next steps. Trump could attempt to nominate a replacement, but Senate confirmation would be contentious, especially if Powell refuses to vacate the chair. Legal challenges could drag on for months, creating uncertainty that markets abhor. Meanwhile, Powell's term as chair ends in May 2026, though he could remain a governor until 2028, complicating any removal efforts.
In the broader context, this episode highlights the enduring tension between executive power and institutional checks. Trump's approach, characterized by bold assertions and public confrontations, contrasts sharply with the more subdued styles of predecessors like Barack Obama or George W. Bush, who generally respected the Fed's boundaries. Whether this leads to a reshaping of the Fed's role or a reinforcement of its independence remains to be seen, but the implications for America's economic governance are profound.
Financial analysts are already modeling scenarios: If Powell is removed, a more dovish chair could slash rates, boosting stocks but risking inflation. Conversely, a prolonged fight could erode confidence, leading to tighter credit and slower growth. For everyday Americans, the stakes are high – from mortgage rates to job security, the Fed's decisions touch every corner of life.
As Powell concluded his press conference, he quoted former Fed Chair Paul Volcker: "The Federal Reserve is a creature of Congress, but it must be free to act in the public interest." In this high-stakes showdown, that freedom is being tested like never before, with the outcome poised to shape the economic landscape for years to come. (Word count: 1,248)
Read the Full CNN Article at:
[ https://www.cnn.com/2025/07/25/politics/powell-trump-fed-chair-resign-fire ]
Similar Humor and Quirks Publications
[ Last Wednesday ]: Seeking Alpha
Category: Politics and Government
Category: Politics and Government
[ Last Wednesday ]: CNN
Category: Politics and Government
Category: Politics and Government
[ Last Saturday ]: nbcnews.com
Category: Politics and Government
Category: Politics and Government
[ Tue, May 13th ]: Seeking Alpha
Category: Politics and Government
Category: Politics and Government
[ Sat, May 10th ]: Seeking Alpha
Category: Politics and Government
Category: Politics and Government
[ Sun, Apr 27th ]: CNN
Category: Politics and Government
Category: Politics and Government
[ Tue, Dec 17th 2024 ]: The Financial Times
Category: Politics and Government
Category: Politics and Government
[ Fri, Dec 13th 2024 ]: MSN
Category: Politics and Government
Category: Politics and Government
[ Thu, Dec 12th 2024 ]: The Financial Times
Category: Politics and Government
Category: Politics and Government
[ Mon, Dec 09th 2024 ]: The Financial Times
Category: Politics and Government
Category: Politics and Government
[ Sun, Dec 01st 2024 ]: Brian Stokes
Category: Politics and Government
Category: Politics and Government