Trump Threatens to Fire Fed Chair Jerome Powell if He Refuses to Step Down on May 15

President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step down from his leadership role when his term as chair ends on May 15, marking a sharp escalation in their long-running feud over monetary policy and interest rates. According to Bloomberg, Trump stated he would remove Powell "in time" and insisted on continuing a Justice Department investigation into the Fed leader, while BBC reports describe this as the latest clash in their ongoing spat.

Powell's term as Fed chair expires next month, but his position on the central bank's board of governors extends until 2028, allowing him to potentially remain as acting chair. Politico details that Powell has vowed not to leave the board until the DOJ probe concludes and has expressed willingness to serve in an interim capacity until Trump's nominee, Kevin Warsh, is confirmed. Trump, in a recent interview, acknowledged holding back on firing Powell to avoid controversy but warned, "Well then, I'll have to fire him, OK? If he's not leaving on time."

The Justice Department investigation centers on Powell's congressional testimony regarding renovations at the Federal Reserve's headquarters, with U.S. Attorney for D.C. officials, including Jeanine Pirro's team, recently visiting the site unannounced, as confirmed to Politico. Some Senate Republicans, including Banking Committee Chair Tim Scott, have questioned whether Powell committed any crime, and a federal judge has blocked certain DOJ subpoenas, viewing the probe as possibly a pretext to pressure the Fed into cutting borrowing costs—a demand Trump has repeatedly made amid his criticism of Powell's rate policies.

Trump's nominee, Warsh, faces a Senate Banking Committee hearing on April 21, but confirmation hurdles persist. One Republican senator has conditioned support on the investigation's resolution, complicating the timeline. KVUE and CNN coverage highlight Powell's determination to stay until a successor is in place, underscoring the tension between executive pressure and the Fed's traditional independence.

This standoff raises questions about the Federal Reserve's autonomy, a cornerstone of U.S. economic stability designed to insulate monetary decisions from political influence. Markets and businesses reliant on steady interest rate policies could face uncertainty, as could everyday borrowers affected by potential shifts in lending costs. Lawmakers and legal experts are watching closely, with next steps hinging on the probe's progress, Warsh's confirmation, and whether Trump follows through on his firing threat.