Trump Demands Powell’s Resignation Amid Fed Spending Probe and Interest Rate Clash

President Donald Trump has escalated his attacks on Federal Reserve Chair Jerome Powell, demanding that he resign immediately. Posting on his Truth Social platform, Trump referred to Powell as “Too Late” and linked to a news article about a federal housing regulator urging an investigation into Powell’s Senate testimony.

The controversy centers around reported renovation expenses at the Fed’s headquarters. Trump, who originally nominated Powell during his first term, has frequently criticized him over interest rate policies.

Trump’s Trade Policies Complicate Rate Cuts, While Legal Limits Shield Fed Chair Powell

Trump has consistently pushed for lower interest rates to boost economic growth, a stance that has brought him into repeated conflict with the Fed. In response, Powell has pointed out that Trump’s own policies—particularly tariffs—contributed to economic uncertainty, making it harder for the Fed to cut rates. Speaking at a central bank meeting in Portugal, Powell confirmed that interest rates might have been reduced if not for the disruptions caused by Trump’s trade actions.

Despite Trump’s public calls for Powell’s resignation, he does not appear to have the legal authority to remove the Fed chair at will. Powell, who was renominated by President Biden, has said he will not step down if asked and cited a 1935 Supreme Court ruling which protects heads of independent federal agencies. According to the law, Powell can only be removed “for cause” before his term ends in May 2026, making Trump’s demand largely symbolic unless serious misconduct is proven.

Trump’s Attacks Reflect Pattern of Defying Norms and Fuel Growing Political Pressure

Trump’s demand for Powell’s resignation is part of a broader pattern of challenging institutional norms, including past efforts to remove independent regulators. These actions have often led to legal disputes and concerns about political interference in agencies meant to remain autonomous. As Trump remains a central figure in American politics, especially with a potential return to the presidency, his stance on the Federal Reserve’s independence is under heightened scrutiny.

Adding to the controversy, Bill Pulte, head of the Federal Housing Finance Agency, has called for Congress to investigate Powell. Pulte accuses him of political bias and giving misleading testimony about costly renovations at the Fed’s headquarters, which he claims could constitute grounds for dismissal. Powell defended himself before the Senate, calling the reports “misleading and inaccurate,” but the growing calls for inquiry add another layer of political pressure to his already embattled position.