Trump Urges Powell’s Resignation, Cites Fed Misconduct

There’s a storm brewing in Washington, and its winds are whipping right around the Federal Reserve. Jerome Powell, the current Fed Chair, finds himself in the eye of this political squall. His term runs until May 2026, but a powerful group of figures seems determined to cut that short.

• President Trump and other figures are putting pressure on Jerome Powell to cut interest rates. They are accusing him of mismanagement and political bias.
• The Federal Reserve is designed to be independent, but political interference is challenging its authority. Rate changes come from a majority vote by the Fed’s Board of Governors.
• The controversy around the Fed’s headquarters renovation has been brought up, but it lacks concrete evidence for removal “for cause.” The administration is pushing for a 2026 replacement.

Over the last couple of weeks, the pressure has really ramped up. We’re seeing President Trump, Federal Housing Finance Agency (FHFA) Director Bill Pulte, White House Press Secretary Karoline Leavitt, and even some congressional allies joining forces. They’re all leveling serious accusations against Powell, from mismanagement to political bias and even deceptive conduct.

For those of us watching the crypto markets, this isn’t just political theater. The Fed’s actions, especially on interest rates, ripple through everything. So, when the independence of the central bank gets challenged, it naturally creates a sense of unease. The big question hangs in the air: Can Powell weather this unprecedented assault?

A Long-Standing Feud Reignites

President Trump, who actually nominated Powell back in 2017, has picked up an old fight. Their initial disagreement started during his first term, when Trump criticized the Fed’s rate hikes. He felt they were hurting economic growth. Things got so tense in 2019 that he publicly considered firing Powell.

Now, after his re-election on November 5, 2024, that stance has only hardened. On June 27, President Trump called Powell a “stubborn mule.” He accused the Fed Chair of costing the country “hundreds of billions” by refusing to cut interest rates. Rates currently sit at 4.25% to 4.5%.

Just a few days later, on June 30, White House Press Secretary Karoline Leavitt publicized a handwritten note. This note, from President Trump, explicitly demanded rate reductions. It even pointed to lower rates in countries like Japan and China as examples.

It’s worth remembering that the Federal Reserve is designed to be an independent body. While the President picks the board members and Congress confirms them, the board is supposed to make its decisions on financial matters without political interference. Plus, rate changes aren’t up to one person. They come from a majority vote by the Fed’s Board of Governors.

The pressure didn’t stop there. On July 3, President Trump took to Truth Social. He urged Powell’s immediate resignation. He even alleged misconduct tied to the Fed’s $2.5 billion headquarters renovation. It’s a detail that often gets overlooked, but that project actually began long before Powell took over as Fed Chair in 2018.

President Trump has, at times, denied plans to fire Powell. But his talk of potential successors, like Kevin Warsh or Christopher Waller, certainly signals a desire to change the Fed’s leadership. The roots of this conflict run deep. Back in 2019, President Trump famously labeled Powell a bigger “enemy” than Xi Jinping, frustrated by rate hikes that he believed slowed the economy.

After his re-election, President Trump’s advisors, including Kevin Hassett, reportedly explored options for firing Powell. This came after the Fed Chair refused to resign.

Beyond President Trump, other voices are joining the chorus. Bill Pulte, the FHFA Director, has been particularly vocal. He argues that Powell’s high-rate policies pose a real threat to the housing market. On July 2, Pulte called for a congressional investigation. He claimed Powell’s June 25 Senate testimony about the Fed’s headquarters renovation was “deceptive.” Pulte said this deception was grounds for removal “for cause.”

Senator Cynthia Lummis, a Republican from Wyoming, supports Pulte’s stance. Pulte specifically claimed Powell misrepresented features like a VIP dining room. He also used X, the social media platform, to make his case. On June 24 and June 28, he accused Powell of political bias. He also suggested Powell was inventing tariff-driven inflation risks. Pulte argues these actions worsen housing unaffordability, with mortgage rates hovering around 6.6% to 7%.

Powell, for his part, has stated that characterizations of “luxury” renovations were not accurate.

A Widening Circle of Critics

The pressure isn’t confined to just President Trump and Bill Pulte. Republican Senators Rick Scott and Tommy Tuberville have also amplified calls for accountability. They’re focusing on what they see as the negative economic impact of Powell’s leadership.

On April 28, Senator Scott criticized Powell for overseeing an “unaccountable Fed.” He claimed it lost over $2 trillion and sought $2.5 billion for a lavish headquarters. He urged accountability for what he called reckless spending. Then, on June 17, Senator Scott condemned Powell’s “horrible decisions.” He said these decisions burdened taxpayers while Fed compensation outpaced public wages. He implied Powell supported policies that hindered growth.

Senator Tuberville has been even more direct. He has repeatedly called for Powell’s firing, including a public statement on June 24.

On July 2, House Judiciary Chair Jim Jordan also weighed in. He signaled an openness to scrutinizing Powell. This came in response to Pulte’s call for a congressional investigation. While speaking to Bloomberg, Jordan noted that no specific plans for an investigation had been discussed. However, he stressed that “everything is on the table” for oversight. He emphasized the House Judiciary Committee’s constitutional duty to oversee the executive and judicial branches.

Then there’s Treasury Secretary Scott Bessent. He’s seen as a potential successor to Powell. Bessent has been advising on the nomination process. On June 30 and July 3, he spoke about nominating a new Fed governor in January 2026. Or, perhaps, a new Chair in May 2026, when Powell’s term naturally ends. Bessent has warned against attempts to fire Powell outright. He cites market risks, like a 15% selloff in April 2025 tied to President Trump’s tariffs. Bessent’s support for rate cuts aligns with the administration’s overall push.

Powell’s Steadfast Defense

Despite this barrage, Powell’s position has some strong legal backing. The Federal Reserve Act states that the Chair can only be removed “for cause.” This means something like gross misconduct. A recent Supreme Court ruling also helps shield the Fed from arbitrary dismissal. Since President Trump’s attacks began in 2018, Powell has largely dismissed political pressure as “noise.” He consistently reaffirms that his policy decisions are driven by data, not politics.

The Fed has kept rates steady at 4.25% to 4.5%. Powell points to President Trump’s tariffs as a source of inflationary pressure. He expects Personal Consumption Expenditures (PCE) inflation to move toward 3% in 2025. This, he argues, requires a cautious policy to maintain long-term expectations of 2% inflation.

At the June 18 FOMC press conference, Powell explained why rates were held firm. He cited tariff-driven inflation risks that could push PCE inflation to 3% in 2025. He also stressed the need for summer data to properly assess how consumer prices are being affected. He acknowledged that the economy is strong. Unemployment sits at 4.2%, and private domestic growth is at 2.5%. This strength, he believes, supports a cautious approach.

However, Powell did acknowledge a potential tension. If tariffs cause persistent inflation, it could create a conflict between employment and price stability. He emphasized the importance of keeping long-term inflation expectations anchored at 2%. This is vital to avoid sustained price increases. When asked about political insults, Powell simply focused on delivering a “good, solid American economy.”

The controversy around the Fed’s headquarters renovation, while loud, seems to lack concrete evidence for removal “for cause.” But the constant talk of a “shadow chair” or a replacement could still chip away at Powell’s authority. It risks creating a “lame-duck” scenario, where his influence wanes even before his term officially ends.

This coordinated campaign, with President Trump’s fiery words, Pulte’s housing critiques, Leavitt’s amplification, congressional scrutiny, and Bessent’s succession plans, certainly creates a difficult environment. Legal protections offer Powell a shield, but the administration’s push for a 2026 replacement could effectively sideline him. Whether Powell can navigate this storm while keeping the Fed’s independence intact remains to be seen. His days, while not immediately numbered, are certainly far from secure.