Trump’s Pick Turned Adversary
When Donald Trump nominated Jerome Powell as Federal Reserve Chair in 2018, few expected the relationship to unravel so quickly. While Powell was initially seen as a safe choice to continue the steady hand of Janet Yellen, the honeymoon didn’t last long. By mid-2019, Trump’s frustrations boiled over, blasting Powell for refusing to slash interest rates during a period of global trade tensions.
The criticism wasn’t subtle. Trump repeatedly took to Twitter, labeling the Fed as “clueless” and Powell as an even bigger threat than Xi Jinping. “The Fed has gone crazy,” Trump said during a 2018 interview, setting the tone for years of public antagonism.
Fast Forward to 2025: A Renewed Showdown
Now in 2025, with Trump once again in the political spotlight and considering another presidential run, his criticism of Powell has reignited. In a recent rally, Trump declared that Powell’s “termination cannot come fast enough,” accusing him of strangling economic growth with tight monetary policy.
At the core of the dispute is the Federal Reserve’s refusal to cut interest rates despite slowing GDP and a stubborn housing market. Trump blames Powell for what he calls the “Biden recession,” claiming the Fed is working against American workers and businesses.
Powell, for his part, remains steadfast. He has avoided engaging directly with Trump, instead using official statements and press conferences to reiterate the Fed’s mission. “The best contribution the Fed can make to a healthy economy is to bring inflation down to our 2% goal,” Powell said during the March FOMC meeting. He acknowledged the political noise but emphasized the importance of independence.
Can Trump Actually Fire Powell?
Legally, it’s not that simple. While presidents appoint the Fed Chair, they cannot fire them without cause. Powell’s term runs through May 2026, and unless he’s found guilty of misconduct or incompetence, he’s unlikely to be removed. Still, the possibility of Trump attempting to reshape the Fed’s leadership through new appointments has become a real concern.
The idea of politicizing the Fed has stirred anxiety on Wall Street and beyond. “If investors start to believe that the Fed is simply an arm of the executive branch, the consequences for U.S. creditworthiness and monetary credibility could be severe,” warned Mohamed El-Erian, chief economic advisor at Allianz.
Global Markets Are Watching Closely
Financial markets hate uncertainty—and Trump’s barbs at Powell have added a new layer of unpredictability. The U.S. dollar recently showed volatility against major currencies, while Treasury yields edged higher as traders factored in possible leadership instability at the Fed.
Major institutional players are calling for calm. “This is not the time to second-guess the Fed’s integrity,” said a strategist at BlackRock. “A functioning and independent central bank is vital for long-term growth, not just in the U.S. but globally.”
European policymakers are also voicing concern. One ECB official, speaking anonymously, said, “Central bank independence is not a luxury—it’s the bedrock of stable, sustainable economies.”
Possible Scenarios on the Horizon
Now that Trump is back in office, the path forward is filled with uncertainty. He may attempt to pressure Powell to resign or strategically use new appointments to push the Fed in a more dovish direction. Such efforts could escalate institutional tensions and spark legal or political backlash.
Alternatively, Powell could stay the course, relying on bipartisan support from Congress and public confidence in the Federal Reserve’s independence. Despite growing political heat, his term is set through 2026, and his commitment to data-driven decision-making remains firm.
In either case, investors should brace for increased market volatility. Political meddling in central banking is typically a red flag, triggering capital flight from emerging markets—and potentially even from U.S. equities if faith in institutional checks begins to erode.
Bottom Line
The Powell-Trump saga is not just a personal rivalry—it’s a test of how resilient the Federal Reserve’s independence really is. As markets absorb every headline and quote, the global economy is once again being influenced by a battle between politics and policy. The next moves from both sides could reshape the economic landscape well into the next decade.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
