Trump suggests he can remove Fed Chair Powell and says he’s ’not happy’ with him over interest rates

Trump threatens to fire Fed Chair Powell over interest rates, sparking legal concerns about central bank independence.

U.S. President Donald Trump attacked Federal Reserve Chair Jerome Powell on Thursday (April 17, 2025) for not cutting interest rates and said he could fire him if he wanted to, renewing a threat from his first term that could cause a major legal showdown over the issue of the central bank's long-standing political independence.

“If I want him out, he’ll be out of there real fast, believe me," Mr. Trump said in the Oval Office while taking questions from reporters during a visit with Italian Prime Minister Giorgia Meloni. “I'm not happy with him.”

Mr. Trump's comments followed a posting on his social media site in which the Republican president called on Mr. Powell to lower the Fed's short-term interest rate and said, "Powell’s termination cannot come fast enough!” The Fed chair's term ends in May 2026.

Mr. Powell was initially nominated by Trump in 2017 and was appointed to another four-year term by Democratic President Joe Biden in 2022. At a November news conference, Mr. Powell indicated he would not step down if Trump asked him to resign and, in remarks Wednesday, made clear that “our independence is a matter of law.” He added: “We’re not removable except for cause. We serve very long terms, seemingly endless terms.”

Mr. Trump's criticism stems from his view that, as he said Thursday, “we have essentially no inflation." The Fed sharply raised rates in 2022 and 2023 to slow borrowing and spending and tame inflation, which dropped steadily from a peak of 9.1% in 2022 to 2.4% last month. Inflation is not far from the Fed's target of 2%. The Fed even cut rates three times at the end of last year.

But since then, Mr. Powell and most other Fed policymakers have underscored that they are keeping rates on hold because of the uncertainty created by Trump's sweeping tariffs, including a 10% tax on all imports and a 145% levy on imports from China.

In remarks Wednesday in Chicago, Mr. Powell reiterated that the Fed was waiting for greater clarity before making any moves and said the tariffs would likely worsen inflation.