President Donald Trump has sparked a firestorm by mulling over the ouster of Federal Reserve Chair Jerome Powell, only to pump the brakes on the idea a day later.
According to New York Post, Trump’s flirtation with firing Powell during talks with top GOP lawmakers on Tuesday sent markets into a tizzy, only for him to downplay the notion to reporters by Wednesday, while tensions over interest rates and a lavish Fed renovation project continue to simmer.
The drama kicked off on Tuesday when Trump reportedly discussed canning Powell with key Republican lawmakers in Congress, a move confirmed by multiple anonymous sources familiar with the talks.
Those GOP lawmakers, according to an administration insider, gave a hearty thumbs-up to the idea of showing Powell the door. “They expressed approval for firing him,” the insider noted, hinting Trump might act soon. But let’s be real—cheering for a pink slip doesn’t mean the deed is done, especially with markets hanging on every word.
By Wednesday, the Dow took a wild ride, dipping nearly 400 points on the news before clawing back to close up 231 points at 44,254.78. That rollercoaster alone shows how much power a mere rumor of Powell’s exit wields over Wall Street.
Trump, sensing the heat, walked back the speculation to White House reporters, dismissing claims he’d penned a termination letter. “We’re not planning on doing anything,” he insisted, though he slyly added it’s “highly unlikely” unless fraud comes into play. Sounds like a classic Trump hedge—keep the door cracked just in case.
Let’s rewind: Trump himself appointed Powell as Fed Chair back in 2018, but the honeymoon ended fast. Powell’s stubborn refusal to slash interest rates, despite Trump’s vocal prodding, has fueled a years-long feud that’s now boiling over.
Adding fuel to the fire is a jaw-dropping $2.5 billion renovation of the Fed’s headquarters in Washington, D.C., a project greenlit in 2021 amid skyrocketing inflation. Costs have ballooned 30% from an initial $1.9 billion estimate, leaving critics—rightfully, in my view—calling it a “Palace of Versailles” for bureaucrats.
The Post broke this story, revealing how the Fed’s losses, now over $220 billion, mean taxpayers are footing the bill as profits usually sent to Treasury for defense or Medicare get siphoned off. It’s hard not to wince at such mismanagement during tough economic times.
Powell, testifying before the Senate Banking Committee on June 25, called The Post’s reporting “misleading and inaccurate,” despite planning documents filed with the National Capital Planning Commission telling a different story. A senior administration official didn’t mince words, branding Powell’s testimony “deceptive.” If documents contradict the chair, shouldn’t someone answer for it?
Even high-profile voices like former DOGE chief Elon Musk have weighed in, dubbing The Post’s scoop on the renovation an “eyebrow raiser” worth a deeper look. When a project smells this fishy, ignoring it isn’t an option for those who value fiscal responsibility.
Meanwhile, a separate administration official pointed out that White House counsel believes the Fed may have skirted D.C. planning rules by failing to submit renovation revisions. That’s not just a paperwork snafu—it’s a question of accountability at the highest levels.
At 72, Powell seems unfazed, with a Fed spokesman citing his April 4 remarks that he “intends” to serve out his term until next May. But intention isn’t a contract, and pressure is mounting. An anonymous administration figure mused, “I think this is all pressure for him to go voluntarily.”
Legal experts note the Federal Reserve Act allows a president to remove a top official for “inefficiency” or “malfeasance,” terms that could cover mismanagement of funds or legal violations, according to Dartmouth economist Andrew T. Levin. That’s a wide net if Trump decides to cast it.
So, where does this leave us? Trump’s hot-and-cold stance on Powell, paired with the Fed’s questionable spending and market nerves, paints a picture of uncertainty. While conservatives like myself cheer accountability, let’s hope any decision respects process over impulse, for the sake of stability.
