Trump Hints at Firing Fed Chair Powell But Says Unlikely, Markets Jitter on Mixed Signals
In a closed‑door huddle with GOP lawmakers on Capitol Hill, President Donald Trump asked whether he should remove Federal Reserve Chair Jerome Powell and claimed “most of you want him gone,” according to multiple attendees. Leaks of the exchange, plus reports that a draft termination letter had circulated inside the White House, sparked an immediate sell‑off in stocks and a jump in Treasury yields as traders braced for unprecedented interference with the central bank.
Speaking hours later alongside Bahrain’s crown prince in the Oval Office, Trump walked the threat back, saying it was “highly unlikely” he would fire Powell unless “fraud” emerged over the Fed’s pricey headquarters renovation. He renewed complaints that Powell’s reluctance to slash interest rates is “hurting growth,” yet insisted he would wait for the chair’s term to end in February 2026. Legal scholars note federal law allows removal only “for cause,” a standard never tested in court.
Congressional reaction split along party lines: GOP Senator Thom Tillis defended Fed independence, warning a dismissal could “shatter U.S. credibility,” while allies like Senator Rick Scott urged Powell to resign voluntarily. The ambiguity leaves Wall Street in limbo ahead of the July 31 FOMC meeting, with CME futures now pricing slimmer odds of rate cuts and analysts cautioning that any fresh White House pressure could rattle markets anew.
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