Trump Warned: Don't Fire Fed Chairman Powell

U.S. Treasury Secretary Scott Bessent advised President Donald Trump not to fire Federal Reserve Chairman (Fed) Jerome Powell, due to concerns about disrupting the market and affecting politics. According to close sources, Bessent emphasized that Powell is set to end his term in May 2026, and firing him at this time is unnecessary as the economy is stable and the market is responding positively to Trump's policies.

Concerns About the Independence of the Fed Information that Trump is considering firing Powell has shaken the financial markets in a short time, raising concerns that political interference in the Fed will undermine the independence of this agency in controlling inflation. Although Trump had previously complained that the Fed needed to lower interest rates sooner, he told the press that there were no plans to fire Powell, even though he had discussed this with Republican lawmakers. Long-Term Influence Strategy on the Fed Bessent emphasized to Trump that if he fired Powell, the acting chair would be Fed Vice Chairman Philip Jefferson, who is also a Biden appointee and close to Powell. The approval of a new nominee is also difficult to occur quickly due to the Senate's summer recess. Instead, Bessent points out a strategic opportunity: "The president will have the power to appoint two important positions at the Fed at the beginning of 2026 — Council member Adriana Kugler's term ends in January and Powell's in May. This is when he can shape the long-term direction of the Fed."