Trump Spares Powell from Axe to Shield Markets from Chaos
Trump's restraint comes amid a stormy relationship with Powell, whom he appointed in 2018 but quickly criticized for hiking rates during his first term, which Trump argued stifled economic growth.
President Donald Trump revealed on August 1, 2025, during a Newsmax interview, that the only barrier to firing Federal Reserve Chairman Jerome Powell is the potential market disruption, despite ongoing clashes over high interest rates and wasteful spending. "They say it would disturb the market," Trump stated. "I would remove him in a heartbeat, but they say it would disturb the market. He gets out in seven or eight months, and I’ll put somebody else in."
Trump's restraint comes amid a stormy relationship with Powell, whom he appointed in 2018 but quickly criticized for hiking rates during his first term, which Trump argued stifled economic growth. Tensions escalated with Trump's tariffs, which Powell cited as a reason for holding rates steady at 4.25% to 4.5% in June 2025, prompting Trump to demand cuts to fuel the booming economy. Trump has repeatedly threatened Powell's job, even drafting a firing letter in July 2025, but backed off after advisors warned of financial fallout.
Adding fuel to the fire is the Fed's headquarters renovation in Washington, D.C., ballooning to $2.9 billion—far over initial estimates and hundreds of millions over budget. Trump slammed the project as excessive, likening it to building a palace, and questioned Powell's oversight amid calls for a congressional probe into the spending. "It’s way over budget by hundreds of millions of dollars. He shouldn’t be doing that," Trump said, drawing on his real estate expertise from renovating the Old Post Office.
With Powell's term ending in May 2026, Trump eyes a replacement to align with pro-growth policies, ensuring lower rates and fiscal discipline to sustain America's economic strength.
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