President Donald Trump doubled down Thursday, April 17, saying he could fire Federal Reserve Chairman Jerome Powell, a move that’s stirred up legal questions and rattled Wall Street. While Trump insists he has the power, experts and lawmakers say the law—and history—are not on his side.
Trump, speaking at a White House tariff event, called Powell’s rate hikes “a disaster” and claimed he could remove him before his term ends in May 2026.
“I’ve got the authority, believe me,” Trump said.
The comments come after weeks of public jabs, with Trump blaming Powell for high interest rates slowing economic growth.
“It’s a bad signal,” said Sarah Kline, a Pittsburgh retiree who follows markets. “Messing with the Fed like that makes me nervous about my savings.”
The Federal Reserve Act of 1913 protects the Fed’s independence, letting presidents appoint chairs but limiting their power to fire them. Legal scholars say Powell can only be removed “for cause”—like misconduct—not policy disagreements. No Fed chair has ever been fired, though Trump tried to oust Powell in 2018, only to back off after aides warned it’d be illegal.
“He’s dreaming,” said Sen. Mark Warner, D-Va., on Capitol Hill. “The law’s clear, and courts would slap this down fast.”
Trump’s team points to a 1926 Supreme Court case, Myers v. United States, saying the president has broad firing power. But later rulings, like Humphrey’s Executor in 1935, shield independent agencies like the Fed.
“It’s a long shot,” said Peter Conti-Brown, a Fed historian at Wharton. “Trump would lose in court, but the fight could spook markets.”
Wall Street felt the heat. The Dow dipped 200 points Thursday, with investors wary of Fed uncertainty. Powell, appointed by Trump in 2017, stayed mum but has defended rate hikes to curb inflation, now at 3.2%.
“It’s a distraction,” said Lisa Shalett, chief economist at Morgan Stanley. “The Fed’s got to stay above politics to do its job.”
Trump’s comments follow his April 2 tariff hikes, which Powell said could raise prices. If Trump tried to fire Powell, he’d likely face a Senate fight to replace him, with GOP moderates like Susan Collins wary.
For now, Powell’s staying put, and the Fed’s next rate decision looms in May.