President Donald Trump said Wednesday he is “highly unlikely” to fire Federal Reserve Chair Jerome Powell — a public reversal that came just one day after privately floating the idea to Republican lawmakers.
In a closed-door meeting at the White House on Tuesday night, Trump discussed the “concept” of removing Powell with about a dozen House Republicans, citing frustration over Powell’s refusal to slash interest rates. According to a White House official, Trump even waved a mock termination letter during the meeting — though it was reportedly drafted by someone else and used more as a prop than a serious move.
“Almost every one of them said I should,” Trump said of the lawmakers, who had originally gathered to discuss cryptocurrency legislation.
However, speaking in the Oval Office Wednesday during a meeting with Bahrain’s Crown Prince Salman bin Hamad Al Khalifa, Trump tempered expectations, saying he was “highly unlikely” to fire Powell — “unless he has to leave for fraud.”
Tensions between Trump and Powell have simmered for months, with the White House increasingly vocal in its criticism of the central bank’s independence. Yet no formal move to remove Powell has been made.
Markets reacted nervously. The S&P 500 dipped 0.7% after early reports of Trump’s threat, before recovering some losses following his more measured comments. Treasury yields also wavered but ended mostly stable.
The House Republicans at Tuesday’s meeting reportedly included members of the far-right Freedom Caucus, whose views don’t reflect the broader GOP consensus. Senate Republicans have shown more restraint. Sen. Thom Tillis (R-NC) warned Wednesday that firing Powell would trigger “a pretty immediate response,” saying turning the Fed into a political arm of the presidency would be a “huge mistake.”
Sen. John Kennedy (R-LA) added that while Powell “hasn’t been perfect,” he believes the Fed chair is acting in good faith: “He’s calling them like he sees them.”
A scheduled meeting between Powell and the House Financial Services Committee on Wednesday was abruptly canceled due to votes in the chamber, a committee aide confirmed.
