(NewsNation) — President Donald Trump denied reporting that he is preparing to fire Federal Reserve Chair Jerome Powell soon.
Trump denied the reports on Wednesday, telling reporters he was unlikely to fire Powell anytime soon despite having repeatedly clashed with the Fed chair over interest rates.
“I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud,” Trump said when asked if he’s ruling out firing Powell.
Trump also told reporters that Powell has “one job” and it is to lower interest rates, as well as suggesting that the Fed lowered interest rates prior to the election in a bid to help Democrats.
A senior White House official tells NewsNation that President Trump asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he will likely soon. The official emphasizes that any decision is subject to change, and a timeline is unclear.
There have been reports that Trump has already drafted a letter, but a senior White House official told NewsNation President Trump has not drafted a letter to fire Federal Reserve Chairman Jerome Powell.
When asked in April about how he felt about his job security, Powell was unfazed.
“I fully intend to serve all my term,” he said.
It is not clear if Trump has the legal authority to fire Powell, with federal law stating that the chair can only be removed for cause, whether disagreement about monetary policy counts as cause has not been tested in the courts.
The Trump administration has pressured Powell publicly, recently accusing the Fed of mismanaging a construction project on its headquarters.
Traditionally, the Fed has operated independently of the White House when it comes to setting interest rates. But Trump has pushed for Powell to act at his behest and cut interest rates to spur economic growth.
Cutting rates, which remain close to a two-decade high, could also cause inflation to spike. Powell has kept rates steady following hikes in 2022 and 2023, indicating he wants to move cautiously as inflation slows.
Powell has also expressed concern that Trump’s tariffs could cause inflation to worsen. After a pause in April, Trump has resumed his policy of instituting “reciprocal” tariffs, sending letters to several countries announcing new tariff rates to go into effect Aug. 1.
Trump has been increasingly aggressive in his insults against Powell, even as June numbers showed the highest increase in inflation in five months.
If Trump were to fire Powell, it could also have a potential impact on the stock market, which has been roiled by uncertainty from tariff announcements and pauses.