In a fresh escalation of his long-running feud with Federal Reserve Chair Jerome Powell, former U.S. President Donald Trump has hinted at firing the very man he once praised as a “wise steward of the economy.” In a fiery July 2025 statement, Trump alleged possible fraud in the Fed’s $2.7 billion renovation project and questioned Powell’s competence. “He’s got a very easy job to do. You know what he has to do? Lower interest rates,” Trump said, lashing out over what he views as Powell’s failure to act.
From Rose Garden Praise to Oval Office Plotting
Trump appointed Powell in 2017 and reaped bipartisan approval. But the relationship has soured spectacularly. Powell, reappointed by President Biden in 2021, now faces the possibility of dismissal. In a recent Oval Office meeting with Republican lawmakers, Trump reportedly waved a draft termination letter and sought opinions on whether he should fire Powell. The feedback? Overwhelming support, with at least one lawmaker posting online that Powell’s firing was “imminent.”
A Financial and Legal Earthquake in the Making
Markets didn’t take the news lightly. The mere hint of Powell’s removal rattled Wall Street — stock futures dipped, the dollar softened, and Treasury yields spiked. At stake is more than just one job. The independence of the Federal Reserve — crucial to economic stability — could be at risk.
But legally, removing Powell isn’t so simple. Fed governors can only be dismissed “for cause,” not over policy disagreements. A recent Supreme Court ruling has further insulated the Fed, recognizing it as a uniquely independent institution. Any attempt to remove Powell would likely trigger a constitutional crisis.
The Renovation Controversy: Real Issue or Red Herring?
Central to Trump’s case is the Federal Reserve's costly HQ renovation. He calls it “extravagant,” but Powell insists the upgrades — mostly for 1930s-era infrastructure — are essential. He’s even requested an independent audit to clear the air.
The Bottom Line
Trump’s war with Powell is no longer just political theater — it’s a battle with real economic consequences. If the Fed’s independence is compromised, the shockwaves could reach every corner of the global economy.
