President Trump has denied plans to fire Federal Reserve Chairman Jerome Powell after telling Republican lawmakers he is likely to move.
Powell says tariff-driven inflation is a big problem for the Fed.
Federal Reserve Chairman Jerome Powell said the US Central Bank is still struggling to determine the impact of tariffs on consumer prices.
Bloomberg – Politics
WASHINGTON – President Donald Trump has denied that he is close to firing Federal Reserve Chairman Jerome Powell after telling Republican lawmakers at a closed door meeting that he is likely to move.
“No, I’m not talking about that. Fortunately, we can make changes in the next eight months or so,” Trump told reporters on July 16, referring to Powell’s conclusions as chairman, which will end in May 2026.
Trump notified Republican lawmakers at an oval office meeting Tuesday night, but will soon fire Powell after the president voted for them on what he should do, a senior White House official told USA Today.
“Almost all of them said I should, but I’m more conservative,” Trump said of the meeting.
For months, Trump has criticized Powell for not lowering interest rates, labeling the Fed chairman as “too late” to stabilize interest rates.
Trump expressed his disappointment that Powell was appointed to lead an independent agency, even though it was Trump who appointed him to the FRED board during his first term in 2017.
“He’s the terrible Fed chair and I was surprised he was appointed,” Trump said. “Frankly, I was surprised that Biden put him in and spread him out, but they did.”
Trump proposes “fraud” in renovating the Federal Reserve HQ
Trump recently seized a $2.5 billion Headquarters renovation project for the Federal Reserve system for three historic landmarks at the National Mall. Balloon costs suggest that Powell could be the basis for his firing.
“I’m not ruled out anything, but I think that’s very unlikely,” Trump said of Powell’s firing. “Unless he has to leave for fraud. There could have been a scam related to the $2.5 billion renovation.”
The initial cost of the renovation was estimated at $1.9 billion in 2019, but it surged to $2.5 billion. The increase of over 33% was due to design changes, material costs, equipment and other “unexpected conditions.” This is more like asbestos than expected toxic contamination in the soil, the Fed said over the weekend.
The Federal Reserve, an independent institution run as a US central bank, typically reduces interest rates to reduce consumer borrowing costs, strengthen economic slump, and keep interest rates high to keep inflation high.
Powell cites the expected increase inflation rate from Trump’s massive tariffs as a reason not to change prices. Inflation accelerated in June, the Labor Bureau announced Tuesday, with prices rising 2.7% over the past 12 months. It was the highest annual inflation rate since February.
On July 11, the Fed refused to comment on rumors that Powell could resign, but multiple times directed USA Today because Powell said he was going to serve his term.
Powell’s term as Fed Chairman ends in 2026, but he can remain governor of the Fed committee until 2028.
It is unclear whether Trump even has legal authority to fire Powell.
In a May 22 ruling, the majority of Supreme Court justice signaled that they believe Trump will not be allowed to fire Powell, claiming that the Federal Reserve is a “uniquely structured, semi-private organization” that is different from other independent agencies. The policy was included in the Supreme Court opinion that allowed Trump to fire two Federal Labor Commission members.
Reach Joey Garrison with X @joeygarrison.
