Trump Escalates Fed Feud With Threat to Fire Powell if He Doesn't Resign in May

President Donald Trump has threatened to remove Federal Reserve Chair Jerome Powell if he does not step down voluntarily in May, marking the sharpest escalation yet in the president's prolonged conflict with the nation's top central banker.

Trump has long criticized Powell for not cutting interest rates aggressively enough, arguing that borrowing costs should be slashed to stimulate economic growth. The latest threat suggests the president may be prepared to take unprecedented action against the Fed's leadership.

Powell's term as Federal Reserve Chair is set to expire in May 2026, but Trump's remarks indicate he wants the chair gone far sooner. Powell has previously signaled he would not resign if pressured by the president, setting the stage for a potential constitutional showdown.

Legal experts are divided on whether a sitting president has the authority to remove the Federal Reserve chair. The Fed is designed to operate as an independent institution, insulated from political pressure, and many economists warn that undermining that independence could rattle financial markets and damage the U.S. economy.

Markets responded nervously to Trump's comments, with investors concerned that political interference in monetary policy could lead to erratic interest rate decisions and fuel inflation. The dollar weakened and Treasury yields moved on the news as traders assessed the potential fallout.

The standoff between Trump and Powell is being watched closely by global financial institutions and foreign governments, many of whom view Federal Reserve independence as a cornerstone of the international monetary system. Any move to oust Powell could have far-reaching consequences beyond U.S. borders.