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The tension between President Donald Trump and Federal Reserve Chairman Jerome Powell is well-documented, extending back to the early days of Trump’s first term in the White House. But Trump’s comments today on social media have reportedly led Treasury Secretary Scott Bessent to step in and warn the president of market consequences should he attempt to fire Powell.
This is according to reporting on Thursday by Politico, which cites two people “close to the White House” who were granted anonymity to discuss sensitive conversations.
The outreach from Bessent was reportedly private in nature. The president remains frustrated that Powell has not yet moved to cut interest rates, publicly expressing his belief that the move should be immediately taken.
The latest bout of frustration emerged early Thursday, when Trump posted to his social media platform Truth Social.
“The [European Central Bank (ECB)] is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’,” Trump said.
“Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS,” he added. “Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
Some interpreted this as a sign that Trump could move to oust Powell from his position sooner than the 2026 expiration of his term, a move that he is technically insulated from at the moment.
But with market volatility at high levels given the administration’s trade policies, an attempt to remove Powell could be interpreted by markets as an unstable move that is already surrounded by legal uncertainty, given the way the Fed is structured within the government.
“Investor confidence that the central bank will make decisions based on the path of the economy rather than on short-term politics is a key underpinning of the U.S.’s global financial reputation,” the Politico report stated after saying that Powell’s job “looks safe for now.”
Neither the White House nor the Treasury Department responded to the outlet’s comment requests.
Trump nominated Powell to serve as Fed Chair in late 2017, and he took office in early 2018 following a tenure with the Fed’s board of governors. He has routinely accused Powell of reacting to markets too slowly, including in a 2024 campaign press conference last summer where he also indicated that he would seek more influence over the Fed if elected.
“The Federal Reserve is a very interesting thing, and it’s sort of gotten it wrong a lot,” Trump said last August. “[Powell] is tending to be a little bit late on things. He gets a little bit too early and a little bit too late. And, you know, that’s very largely a gut feeling. I believe it’s really a gut feeling. And I used to have it out with him. I had it out with him a couple of times, very strongly. I fought him very hard, and we get along fine.”
Trump regularly lashed out at Powell over the course of his first term in office, and Powell said in a 2019 congressional hearing that he would not comply with a firing from the president if one came. He has largely maintained that position into the president’s second term.
Traditionally, the president has had limited influence over Fed policy. Framers of the central bank expressed early beliefs that it should be sheltered from political influence as much as possible in order to focus solely on economic trends and data to drive decisions.
While members of the board, the chair and vice chair are appointed by presidents and confirmed by the Senate, the full term of office for a governor is 14 years. This aims to ensure that a governor who serves a full term will span multiple presidential administrations, reducing political pressure from any single president when making appointments.
Chairs and vice chairs are elected to four-year terms. Trump will nominate the next Fed chair as Powell’s term ends in May 2026, and Bessent previously indicated that discussions are already taking shape regarding who the next Fed chair will be.
On Monday, Bessent told reporters that candidates will likely start being interviewed for the role this fall, and that the situation at the Fed appeared to be “business as usual” when he visited last week.
