US President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not leave his post in May. The threat comes amid a long-standing dispute between the two over Powell's reluctance to cut interest rates, despite Trump's repeated calls for such action.
Powell's term is set to expire on May 15, but he plans to remain in the position until his successor, Kevin Warsh, is confirmed by the Senate. However, Trump has expressed his dissatisfaction with Powell's decision to stay on, stating, "Then I'll have to fire him," in an interview with Fox Business. Trump added, "I've held back firing him. I've wanted to fire him, but I hate to be controversial."
Senate Confirmation Process
The confirmation process for Warsh has been complicated by Senator Thom Tillis, who has threatened to block the nomination unless a criminal investigation into Powell, related to the renovation of the Federal Reserve building, is dropped. Powell has stated that he will stay on temporarily if Warsh is not confirmed before his term expires, citing the law and precedent. Tillis has warned that he will not let Warsh's appointment proceed unless the investigation is ended.
Other Republican senators have also weighed in on the issue. Senate Majority Leader John Thune has called for the Department of Justice to conclude its probe into Powell, stating, "I think it's in everybody's best interest to wrap up the investigation." Senator Mike Rounds has also expressed his opinion that the investigation is not serving its purpose, which is to help the president appoint the next Federal Reserve chairman.
Trump has expressed hope that Tillis will drop his opposition to Warsh's appointment, but has also made it clear that he is not willing to have the investigation into Powell dropped. He told Fox Business, "Don't you think we have to find out what happened there? I have to find out."
Treasury Secretary Scott Bessent has expressed optimism that Warsh will be confirmed before May 15, stating, "I am sure Senator Tillis wants to do the best thing for the Federal Reserve for the American people."
Historical Context
If Trump were to fire Powell, it would mark a significant break with precedent, as no Federal Reserve chair has been fired before. Trump appointed Powell to lead the Federal Reserve in 2017, praising his "steady leadership, sound judgement, and policy expertise." Powell was reappointed by Joe Biden in 2021.
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