The Node: The Plot to Fire Powell
2025-07-16 20:01:14
Main Idea
The White House, led by Donald Trump, is increasing pressure on Federal Reserve Chairman Jerome Powell due to dissatisfaction with his monetary policies, including his reluctance to cut interest rates further, and there are discussions about potentially replacing him.
Key Points
1. Donald Trump is unhappy with Jerome Powell for not further easing monetary policy after cutting interest rates by 75 basis points ahead of the 2024 election.
2. Powell maintains that Trump lacks the legal authority to remove him from his position, as Fed chairs can only be dismissed 'for cause.'
3. Critics, including Republican members of Congress and former Federal Reserve governor Kevin Warsh, are calling for Powell's removal, citing his actions over recent months.
4. Rumors about Powell's potential firing intensified after reports of a 'formal process' to replace him, though Trump later denied plans to dismiss him.
5. Market indicators suggest a low probability of an interest rate cut at the next FOMC meeting in July, but higher odds for September.
Description
Donald Trump is unhappy with the head of the U.S. central bank. Here’s why: Powell, who hurriedly cut federal interest rates by 75 basis points ahead of the 2024 election, has been reluctant to ease monetary conditions further, citing potentially inflationary effects of the White House’s new tariff policies. Trump has been floating the idea of firing him for a while now. The regulator, for his part, has maintained since November that Trump lacks the legal authority to do so. Powell’s term is sla...
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