President Donald Trump stated that he has no intention of dismissing Federal Reserve chair Jerome Powell, amid an ongoing criminal investigation by the Department of Justice.
Trump, in an interview with Reuters on Wednesday, said the administration was currently in “a little bit of a holding pattern” with Powell and was still determining its next steps, but declined to provide details, saying it was “too soon, too early.”
The president also indicated that he is considering former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett as potential replacements for Powell. He also ruled out U.S. Treasury Secretary Scott Bessent for the role, stating that Bessent wants to remain in his current position.
Trump stated that he would announce the next Fed Chair over the “next couple of weeks.”
Powell Letter Undercuts Probe Claims
The ongoing feud between the Trump administration and the Federal Reserve has been marked by several dramatic turns. The revelation of details about the Fed’s $2.5 billion renovation project in a letter from Powell to senators contradicts the probe’s claims that the Fed Chair misled Congress.
Meanwhile, Kalshi traders are assigning a 44% probability that Trump would try to remove Powell from both the Fed chairmanship and the Board of Governors before 2027, even though Powell’s term as chair ends in May and his governor role runs two more years.
Experts Raise Alarm Over Fed Independence
Trump’s threats to jail Powell over the renovation project have also raised concerns. Economist Justin Wolfers warned that such actions could spark hyperinflation fears, likening them to the tactics of authoritarian regimes in countries like Argentina, Russia, and Venezuela.
Former Federal Reserve Chair Janet Yellen has also voiced her concerns, calling the DOJ Powell probe “extremely chilling” for the central bank’s independence. Yellen suggested that the lack of concern in financial markets was surprising, stating that “it seems to me that the market should be concerned.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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