US President Donald Trump has said he is “highly unlikely” to dismiss the chairman of the Federal Reserve, Jerome Powell, just hours after raising the possibility with Republican lawmakers.
Markets and the dollar dipped briefly on Tuesday following reports that Trump had discussed firing Powell, but quickly rebounded after he downplayed the remarks.
Trump, who originally appointed Powell during his first term, has frequently criticised the Fed chair, repeatedly urging him to cut interest rates. His frustration has escalated in recent weeks, with allies accusing Powell of mishandling the renovation of Federal Reserve properties.
Continuing his attacks on Wednesday, the president described Powell as a “knucklehead” and accused him of “doing a lousy job”.
He admitted to reviving discussions about removing Powell, despite having appeared to drop the idea earlier this year, but said: “I’m not planning on doing anything.”
Pressed further on whether he was ruling out Powell’s removal, Trump replied: “It’s highly unlikely unless he has to leave for fraud.”
Powell’s current term as chair of the Federal Reserve ends in May 2026, but he can remain on the Fed’s Board of Governors until 2028.
The Federal Reserve is an independent body created by Congress and is responsible for setting monetary policy without direct interference from the White House.
Powell has previously insisted that the president does not have the legal authority to dismiss him over disagreements on policy. However, officials within the Trump administration have suggested he could be removed for cause.
Earlier this week, Treasury Secretary Scott Bessent said a “formal process” was under way to find a possible successor to Powell.
Among those floated as potential replacements are Bessent himself, Kevin Hassett – the current head of the National Economic Council – and conservative economist Kevin Warsh.
Trump nominated Powell to lead the Fed in 2017, succeeding Barack Obama’s appointee Janet Yellen. Former President Joe Biden extended Powell’s term in 2021.
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