June 20, 2025
Trump threatens to fire Fed Chair Powell after rates stay unchanged
Presidential politics clash with central bank independence as markets react
đź“śConstitutional Lawđź’°Economy
President Trump publicly threatened to fire Federal Reserve Chair Jerome Powell after the Fed kept interest rates unchanged, revealing the tension between presidential politics and central bank independence that directly affects your mortgage, credit cards, and savings.
June 12, 2025: President Trump called Fed Chair Jerome Powell a “numbskull” while urging a rate cut, claiming lower rates would save $600 billion annually, though he said he would not fire him (CNBC).
Under the Federal Reserve Act (Section 10), the President may remove the Fed Chair only “for cause” (misconduct, neglect of duty, or incompetence), not over policy disagreements.
Federal Reserve Chairs serve 14-year terms to span multiple presidential administrations, safeguarding monetary policy from short-term political pressures.
April 22, 2025: U.S. stocks, bonds, and the dollar all slumped when President Trump publicly threatened Fed Chair Powell, illustrating markets’ reliance on Fed independence (Reuters).
Jerome Powell’s current term as Fed Chair runs through May 2026, insulating him from immediate removal based on presidential disagreement.
Congress created the Federal Reserve in 1913 with statutory independence to prevent political interference in monetary policy.
Weimar Germany’s 1920s hyperinflation is a historical example of the risks of political control over a central bank, underscoring the value of Fed independence.
đź“śConstitutional Lawđź’°Economy
People, bills, and sources
Donald J. Trump (President, 2025
present; publicly criticized and threatened to remove Fed Chair Powell over interest-rate policy)
Jerome H. Powell (Federal Reserve Chair; leads the Fed’s policymaking body, serving under a 14-year term and protected by for-cause removal rules)
Actor
Scott Bessent (Treasury Secretary; warned firing Powell would risk destabilizing financial markets)
Actor
What You Can Do
1
Monitor the Federal Reserve’s rate decisions, meeting calendars, and policy statements at federalreserve.gov to see how monetary policy may affect your loans and savings.
2
Track any proposed changes to the Fed’s structure or authority on congress.gov, where you can view bill texts, committee hearings, and roll-call votes.
3
Contact your U.S. Senators and Representatives to share your views on preserving central bank independence—find their offices and phone numbers at house.gov and senate.gov.
4
Learn about the Fed’s legal framework by reading the Federal Reserve Act (federalreserve.gov) and Supreme Court precedents like Humphrey’s Executor accessible on supreme court websites.
5
For practical guidance on how interest-rate shifts impact consumer finance, consult the Consumer Financial Protection Bureau’s resources at cfpb.gov.