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President Donald Trump has once again suggested he might fire Federal Reserve Chair Jerome Powell, and it’s making a lot of people nervous. Financial experts, business leaders, and politicians are all concerned that Trump’s actions could harm the economy and hurt the Federal Reserve’s independence, which is a key part of keeping the U.S. economy stable and fair.
Trump is unhappy with Powell because he hasn’t lowered interest rates as much or as fast as the president would like. According to a report by Politico, Trump even showed a group of House Republicans a draft letter that would remove Powell from his position. When news of this came out, the stock market reacted badly, with prices falling as investors worried about more uncertainty in an already weak economy.
JPMorgan Chase CEO Jamie Dimon said during a call with reporters that messing with the Fed is a dangerous move. He explained that the Fed must stay independent—meaning it should make decisions based on what’s best for the economy, not on politics. Dimon said even if Trump doesn’t like Powell’s decisions, replacing him could actually make things worse.
Meanwhile, the White House is quietly looking at possible replacements for Powell. Some of the names being considered include Kevin Hassett (head of the National Economic Council), Kevin Warsh (a former Fed board member), Scott Bessent (Treasury Secretary), and Chris Waller (current Fed board member).
Some of Trump’s own allies are trying to talk him out of removing Powell. They say having someone who pushes back is actually good because it prevents mistakes, like the one made in the 1970s, when President Nixon pressured the Fed to keep rates too low, which led to huge inflation and economic trouble.
Even though the White House is saying publicly that it respects the Fed’s independence, there are still doubts. Kevin Hassett said on TV that everyone in the administration understands how important it is not to interfere, but people are watching closely to see if Trump actually means that.
Legally, it’s not even clear if the president can fire the Fed chair without a serious reason. Some recent hints from the Supreme Court suggest they may step in to stop it, but Trump has ignored court rulings before. If he does try to remove Powell just for not lowering rates, experts warn it could damage America’s financial system and make the economy even shakier.
In short, Trump’s threats have made an already fragile economy more uncertain, and many worry that political pressure on the Federal Reserve could do long-term damage to how money and markets are managed in the U.S.