The tense relationship between US President Trump and Federal Reserve Chairman Powell (Jerome Powell) has escalated again. White House Economic Advisor Kevin Hassett stated that the Trump administration is "studying" whether they have the right to replace Powell, which could not only impact the independence of the Federal Reserve but also potentially cause severe fluctuations in global financial markets.
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ToggleTrump: If I Want Him to Leave, He'll Leave Quickly
Trump has recently intensified his criticism of Powell. He believes the Federal Reserve should immediately cut interest rates, otherwise it will drag down US economic growth. During a public event in the Oval Office on Friday, Trump directly stated: "If we had a Fed chairman who knows what to do, interest rates would have been lowered already. He should immediately lower the rates." He added a harsh remark: "I am very dissatisfied with him. If I want him to leave, he'll leave quickly, believe me."
Hassett: New Legal Analysis May Change Our Position
When asked at a press conference whether "firing Powell has now become a viable option," White House Economic Advisor Hassett said: "The president and his team will continue to study this issue."
Hassett also specifically mentioned that in his 2021 publication, he had stated that if Trump had fired Powell at the time, it would have damaged the Federal Reserve's reputation as a neutral monetary policy institution and could have even led to a decline in US dollar credibility and stock market collapse. However, his attitude has now changed, emphasizing that the "market environment is completely different" and noting that "if a new legal analysis suggests a different conclusion, we would need to rethink our response."
Legal Battle Affecting Powell's Fate? Supreme Court Case Draws Attention
Currently, the Supreme Court is hearing a case related to Trump: whether he overstepped his authority in firing two Democratic members of the Federal Labor Commission. This case could become a legal precedent for Trump's potential removal of Powell. Although Hassett did not explicitly indicate whether the "new legal analysis" is related to this case, the market has begun to pay attention to whether this will affect the personnel layout of the Federal Reserve.
Powell Responds: Law Does Not Allow, and He Will Not Resign
In response to Trump's repeated statements and potential actions, Powell responded this week. He emphasized that according to current law, the president has no right to dismiss him; even if he is asked to resign, he will not leave. He plans to fulfill his responsibilities as Federal Reserve Chairman until the end of his term in May 2026, while his term as a Federal Reserve Board member will continue until January 2028.
Old Grievances Unresolved, Trade Policies Spark Conflict Again
The conflict between Trump and Powell is not new. Although Powell was nominated as Federal Reserve Chairman during Trump's term, Trump later became dissatisfied 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 might lead to inflation while simultaneously suppressing economic growth, putting the Federal Reserve in a policy-making dilemma. Trump again accused Powell of not lowering interest rates, criticizing him for "playing politics".
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