White House economic adviser Kevin Hassett said Friday that President Donald Trump and his team are reviewing whether to fire Federal Reserve Chair Jerome Powell, amid renewed tensions between the president and the central bank over interest rate policy.
“The president and his team will continue to study that matter,” Hassett told reporters at the White House in response to a question about Powell’s future.
“At that time, the market was in a completely different place,” Hassett said. “I was referring to the legal analysis of the impact then. If there’s a new legal analysis that says something different, then there would be a different market response as well.”
Hassett’s comments came one day after Trump accused Powell of “playing politics” by refusing to cut interest rates, and said he had the authority to remove the Fed chair “real fast.”
Speaking to reporters later that day in the Oval Office, Trump reiterated his dissatisfaction with Powell’s performance.
“I don’t think he’s doing the job. He’s too late, always too late and slow,” Trump said. “And I’m not happy with him. I let him know it, and if I want him out, he'll be out of there real fast—believe me.”
Asked by reporters in the Oval Office whether he regrets appointing Powell, Trump called him “terrible” but said he “can’t complain” about Powell’s first-term performance due to the strength of the economy at the time.
Powell, nominated by Trump in 2017 and reappointed by President Joe Biden in 2022, has repeatedly stressed the importance of Fed independence. Speaking at the Economic Club of Chicago on April 16, Powell said the central bank would not yield to political pressure.
“We’re never going to be influenced by any political pressure,“ he said. ”People can say whatever they want. That’s fine; that’s not a problem. But we will do what we do strictly without consideration of political or any other extraneous factors.”
He also emphasized that Fed officials are legally protected from arbitrary dismissal.
“Our independence is a matter of law,“ Powell said. ”We’re not removable except for cause. We serve very long terms, seemingly endless terms. So we’re protected by law. Congress could change that law, but I don’t think there’s any danger of that. Fed independence has pretty broad support across both political parties and on both sides of the Hill.”
Still, Powell acknowledged that a pending Supreme Court case could affect the boundaries of that legal protection. The case involves Trump’s past removal of two Democratic appointees from federal labor boards, and some legal experts argue a ruling in Trump’s favor could make it easier for the president to remove officials in other independent agencies, including the Fed.
Asked about the matter during the Chicago event, Powell said: “That’s a case that people are talking about a lot. I don’t think that decision will apply to the Fed—but I don’t know. It’s a situation we’re monitoring carefully.”
In related filings, attorneys have argued before the high court that siding with Trump could set a precedent that threatens the Fed’s independence. The case is being closely watched by economists and central bank observers alike. Hassett’s remarks to reporters on Friday suggest the president and his team are also studying the case carefully.
Trump’s criticism of Powell stems from his view that inflation is essentially under control and that the Fed is dragging on the economy by holding interest rates high.
The Fed raised interest rates aggressively throughout 2022 and 2023 in an effort to bring inflation under control. Those actions helped push inflation down from a peak of 9.1 percent in 2022 to 2.4 percent last month—just shy of the Fed’s 2 percent target. At the end of last year, the Fed cut rates three times as inflation eased.
Since then, however, Powell and most central bank officials have signaled a pause, citing uncertainty stemming from Trump’s sweeping tariff policy, including a 10 percent tax on all imports and a 145 percent levy on Chinese goods.
Speaking in Chicago on Wednesday, Powell said the Fed was holding off on further action until it had more clarity, saying that the new tariffs could drive inflation higher.
