Who Can Fire Jerome Powell? Calling Bluffs on Trump's Threat

As President Donald Trump escalates his attacks on Federal Reserve Chair Jerome Powell, questions resurface that shake the very foundation of the U.S. financial system: 

Can the president fire the Fed chair? It's a question of law, precedent, and institutional independence — and the answer is far more complex than any campaign soundbite can convey.

The Roots of a Presidential Feud

Federal Reserve Chair Jerome Powell was appointed by Donald Trump in 2017, replacing Janet Yellen. But what started as a strategic nomination quickly soured. 

Powell’s insistence on preserving the Fed’s independence and resisting political pressure — especially to cut interest rates — has frustrated Trump for years.

Now, during Trump’s renewed campaign and second-term rhetoric, he has made Powell a central target, declaring, “If I ask him to leave, he’ll be out of there.” Powell has maintained his ground. When asked if he would step down if requested by Trump, he answered bluntly: “No.”

This ongoing friction raises a legal and constitutional dilemma: Who can fire Jerome Powell — and under what authority?

Read also: Jerome Powell Termination: Analyzing Its Impact on Crypto

The Law Behind the Fed Chair's Job Security

The U.S. Federal Reserve Act outlines that a member of the Board of Governors of the Federal Reserve can only be removed “for cause.” While that sounds like a clear standard, it’s actually a legal gray zone.

“For cause” traditionally refers to misconduct, criminal behavior, or incapacitation — not policy disagreement. It’s never been tested in the context of a Fed chair being removed by a president. In fact, in over a century of Fed history, no chair has ever been fired.

This structure is deliberate. The Fed was designed by Congress to be insulated from political influence, with 14-year staggered terms for governors and a four-year renewable term for the chair. 

Powell’s term as chair ends in May 2026, but his term as a Fed governor runs through January 2028. Even if he were removed as chair, he could remain on the Board — and potentially still influence interest rate policy.

Trump’s Legal Gambit — And Why It’s Risky

Trump’s renewed threats have prompted legal scholars and financial analysts to revisit an ongoing case before the Supreme Court: Wilcox v. Trump. Though unrelated to the Fed directly, the case examines whether heads of independent agencies can be fired by the president, challenging “for cause” protections.

If the Supreme Court rules broadly, it could reshape how presidents interact with independent agencies — potentially opening the door for Trump to try to remove Powell. 

However, the Federal Reserve’s unique design and its critical role in global finance may still afford it more protection than other agencies.

In other words, Trump may not legally have the power to fire Powell, and doing so would almost certainly provoke a constitutional showdown.

Read also: Is Jerome Powell More Dovish? Looking at the Latest Speech from the Fed's Chair

Market Repercussions and Economic Consequences

Even if Trump never follows through, his threats alone are already shaking markets. Investors rely on the Fed’s independence to ensure stable, data-driven monetary policy. 

A politically controlled Fed would erode confidence in U.S. financial institutions and the dollar.

In early April, following Trump’s tariff announcement and anti-Powell comments, the S&P 500 lost nearly $6 trillion in value. 

The dollar, typically a safe haven during global turmoil, failed to rally — an alarming signal that the world is beginning to question the reliability of U.S. economic leadership.

Saleha Mohsin, a Bloomberg Washington correspondent, warns: “It is a third rail of global finance that the U.S. central bank should be independent. And Trump’s threats undermine that confidence.”

Why Fed Independence Matters — To All Americans

The Fed’s primary tool is the ability to set interest rates — influencing everything from mortgage costs to business loans. If those decisions become politically motivated, the result could be runaway inflation, asset bubbles, or even economic contraction.

A loss of Fed independence could also impact America’s global economic standing. The U.S. dollar serves as the world’s reserve currency — a status supported by stable institutions, transparent governance, and predictable policymaking. 

Undermining those principles threatens not just Wall Street, but the pocketbooks of everyday Americans.

As Mohsin notes, “The only way the U.S. can carry the kind of debt it has is because global investors trust the Fed and the dollar. That trust is now under stress.”

Read also: Elizabeth Warren Warns of Potential Economic Crash! Is the US Close to Collapsing?

Can President Trump Fire Fed Chair Jerome Powell?

Legally? Probably not — unless the Supreme Court drastically redefines “for cause” removal protections.
Practically? It would provoke a fierce political and legal battle with massive economic fallout.
Politically? It may be more about messaging — creating a scapegoat if the economy stumbles.

Despite Trump’s claims, the answer to “Who can fire Jerome Powell?” is not simple — and it certainly isn’t unilateral. 

Whether Powell stays or goes, the real question is what this fight means for U.S. credibility, economic policy, and the strength of democratic institutions.

FAQ

1. Who can fire Jerome Powell?

Under current law, only the President can initiate removal, but only “for cause”—a legal standard typically interpreted as requiring evidence of misconduct, incapacity, or malfeasance. The Federal Reserve Act does not give the president blanket authority to fire the Fed Chair at will.

2. Can President Trump fire Fed Chair Jerome Powell?

Legally, not easily. While Trump appointed Powell and has publicly expressed frustration with him, he cannot remove him arbitrarily. Powell holds two roles: Fed Governor (term ends 2028) and Fed Chair (term ends 2026). The President may designate someone else as Chair after that, but cannot remove him from the Board without legal justification.

3. What does “for cause” mean in this context?

“For cause” generally means the official must have committed an act of gross misconduct, incompetence, or dereliction of duty. It’s a high bar. There is no precedent for removing a Fed Chair using this standard.

4. What happens if Trump tries to fire Powell anyway?

It would almost certainly trigger a constitutional and legal challenge, possibly reaching the Supreme Court. Legal scholars believe the Fed’s independence makes Powell’s position more protected than other agency heads.