Trump considers replacing Federal Reserve Chairman Powell? White House advisor: still under review

The tension between U.S. President Trump and Federal Reserve Chairman Jerome Powell has escalated once again. White House economic advisor Kevin Hassett stated that the Trump administration is "exploring" whether it has the authority to remove Powell, which could not only impact the independence of the Federal Reserve but also lead to severe fluctuations in global financial markets.

Trump: If I want him to leave, he will leave very quickly.

Trump has recently ramped up his criticism of Powell. He believes that the Federal Reserve should lower interest rates immediately, or it will drag down U.S. economic growth. At a public event in the Oval Office on Friday, Trump stated plainly: "If we had a Federal Reserve chairman who knew what he was doing, interest rates would have been lowered a long time ago. He should cut rates right now." He also added a harsh remark: "I am very unhappy with him. If I wanted him out, he would leave very quickly, believe me."

Hassett: New legal analysis may change our position

White House economic advisor Hassett was asked at a press conference whether "firing Powell has now become a viable option," and he responded: "The president and his team will continue to study this issue." Hassett also specifically mentioned that in his 2021 publication, he stated that if Trump had fired Powell at that time, it would have harmed the Federal Reserve's reputation as a neutral monetary policy agency and could even lead to a decline in the dollar's credibility and a stock market crash. However, his attitude has changed now, emphasizing that "the market environment is completely different," and mentioned that "if there is a new legal analysis that points to a different conclusion, we need to rethink our response."

Will the legal battle affect Powell's fate? The Supreme Court case is attracting attention.

Currently, the Supreme Court is hearing a case related to Trump: whether he overstepped his authority by dismissing two Democratic members of the Federal Labor Relations Board. This case could set a legal precedent for Trump if he wants to remove Powell from his position in the future. Although Hassett did not explicitly state that the "new legal analysis" he referred to is related to this case, the market has already begun to pay attention to whether this will affect the personnel layout of the Federal Reserve (FED).

Powell responded: The law does not allow, nor will he resign.

In response to Trump's series of statements and possible actions, Powell made a statement this week. He emphasized that under current law, the president does not have the authority to remove him; even if asked to resign, he will not leave. He plans to fulfill his duties as Chairman of the Federal Reserve until the end of his term in May 2026, while his term as a member of the Federal Reserve Board will continue until January 2028.

Old grievances unresolved, trade policies ignite sparks again.

The conflict between Trump and Powell is not a new issue. Although Powell was nominated as the Chairman of the Federal Reserve during Trump's term, Trump later expressed dissatisfaction with Powell's interest rate hike policy and repeatedly criticized him in public. In the past week, Federal Reserve officials stated that Trump's advocated high tariff policy could lead to rising inflation while simultaneously suppressing economic growth, putting the Federal Reserve in a dilemma in policy-making. Trump again accused Powell of not lowering interest rates, criticizing him for "playing politics."

This article discusses whether Trump is considering replacing Federal Reserve Chairman Powell? White House advisor: still under study. First appeared in Chain News ABMedia.