5 Fast Facts on Why Trump Can’t Fire Powell

Despite all the rumors, the US President can’t fire the FED Chair. Jerome Powell, appointed by Trump in 2018 and reappointed by Biden in 2021, is serving a 4 year term that ends in May 2026. A Supreme Court ruling on May 22, 2025 confirmed the legal protections that safeguard Powell’s position, stating the FED is independent of the executive branch. No president has ever fired a FED chair, that’s how important the institution is for stable economic policy.

Jerome Powell himself has said that firing him is “not permitted under the law” reaffirming the FED Chair’s insulation from political interference. This separation ensures decisions are based on economic reality not political pressure.

Trump’s Options Beyond Firing Powell

Although the President can’t fire Powell directly, he has other ways to influence. The most obvious is not reappointing Powell when his term ends in May 2026. This indirect control can shape future FED leadership and policy direction.

Meanwhile Trump and Powell are at odds, especially over tariffs and interest rates. Trump has publicly asked Powell to cut rates to stimulate the economy but the FED has been cautious. At the latest FOMC meeting rates were left unchanged, reflecting the uncertainty over the tariff disputes.

• Powell said decisions will be “based on economic data, not political pressure”.

• The US Trade Court just upheld Trump’s tariffs despite legal challenges.

• Chicago Fed President Austan Goolsbee said interest rate cuts could happen in 2025 if tariffs are resolved.

Market Reaction and Outlook

Markets, including cryptocurrencies and the S&P 500, are cautious as the uncertainty around FED policy and Trump’s tariff strategy continues. Investors are watching for signs of rate cuts which could impact borrowing costs, inflation and overall market confidence.

Key takeaways for market watchers:

• FED independence is key to market stability.

• Tariffs are a major risk factor.

• Rate moves in 2025 will be based on data not politics.

• Volatility will continue until clarity on tariffs and FED leadership.

As the clock ticks down to Powell’s term end all eyes are on how politics and economic data will shape the FED’s future and market sentiment.