Powell: Fed needs clarity on tariffs, policy changes
Federal Reserve chair Jerome Powell says that they need “greater clarity” on tariffs before deciding to cut interest rates.
President Donald Trump said he’s looking forward to Federal Reserve Chair Jerome Powell’s termination, but can the president fire Powell himself?
At the April 16 speech at the Economic Club of Chicago, Powell warned about the impact Trump’s tariffs could have on the economy, saying the Fed could find itself in a “challenging scenario” as the tariffs are expected to raise prices and slow the economy.
Trump took to Truth Social to slam Powell, saying he “should have lowered Interest Rates… long ago, but he should certainly lower them now.”
“Powell’s termination cannot come fast enough!” the post stated. But, Trump can’t legally fire the Fed chair himself. Here is what to know:
Can President Donald Trump fire Fed chair Jerome Powell?
Legally, no.
Powell addressed the potential for political pressure during his speech in Chicago.
“Our independence is a matter of law,” Powell said, explaining that the Fed governors are not removable except “for cause,” as determined by law.
“So, you know, Congress could change that law. But, I don’t think there’s any danger of that,” Powell said. “Fed independence has pretty broad support across both political parties and both sides of the Hill.”
However, Powell also mentioned a case that Trump is asking the U.S. Supreme Court to hear that would change the landscape of independent boards’ relationship with those in power, if the court agrees with Trump. At its core, the case would challenge the 1935 Humphrey’s Executor precedent, which holds that the president can’t fire independent agency board members without cause.
“I don’t think that decision will apply to the Fed, but I don’t know. It’s a situation we’re monitoring carefully,” Powell said.
Powell was appointed as chair during the first Trump administration, and he was reappointed for a four-year term in 2022.
Contributing: Aysha Bagchi, Erin Mansfield, Paul Davidson, Zac Anderson, Jordan Culber, USA TODAY
Kinsey Crowley is a trending news reporter at USA TODAY. Reach her at [email protected]. Follow her on X and TikTok @kinseycrowley or Bluesky at @kinseycrowley.bsky.social.