If Trump tries to fire Powell, Fed Chair is ready for a legal fight
Subscribe to enjoy similar stories. When a frustrated Donald Trump flirted with removing Federal Reserve Chair Jerome Powell in a dispute over interest rates back in 2018, Fed leaders privately readied a break-glass-in-case-of-emergency response: a legal challenge against the president to protect the integrity of America’s central bank. Powell told then-Treasury Secretary Steven Mnuchin that he would fight his removal if sought by the president, according to people familiar with the matter.
Trump was upset the Fed was raising interest rates against his wishes. For Powell, the unsavory prospect of a legal showdown—one he might have to pay for out of his own pocket—was imperative to preserve the ability of future Fed chairs to serve without the threat of being removed over a policy dispute. Six years later, Trump is heading back to the White House and the dormant drama of his fraught relationship with Powell is back on display.
When asked last week whether he would resign if asked to do so, Powell offered a one-word reply: “No." He gave the same answer when asked if the president had the authority to dismiss him. Powell, a former private-equity executive who has a law degree, was later pressed to explain his rationale. He delivered another curt response: “Not permitted under the law." His unflinching rejoinders laid bare the prospect that any attempt to force Powell to leave before his term ends in 2026 would likely be resolved in an unprecedented legal battle—the same one Fed leaders had prepared for years ago.
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