Attacks on Federal Reserve Independence: Threatening to Fire Jerome Powell and Using Political Pressure to Influence Monetary Policy
Tier 3Ongoing2018-07-19 to 2026-01-13
Factual Summary
Beginning in 2018 and escalating through his second term, Donald Trump conducted an unprecedented public campaign to undermine the independence of the Federal Reserve and to pressure its chair, Jerome Powell, into lowering interest rates for political benefit. This campaign included public insults, threats of removal, and ultimately the use of the Department of Justice to open a criminal investigation into Powell.
Trump nominated Powell as Federal Reserve Chair in November 2017. Powell was confirmed by the Senate and took office in February 2018. Within months, Trump began publicly criticizing the Fed for raising interest rates, which the central bank was doing as part of its mandate to manage inflation and maintain economic stability.
In July 2018, Trump broke with decades of presidential norms by publicly criticizing Fed rate decisions. Previous presidents of both parties had maintained a practice of not commenting on the Fed's monetary policy actions, recognizing that central bank independence is a cornerstone of economic stability. Trump abandoned this norm entirely. Over the following years, he called Powell "incompetent," "clueless," and worse, using social media and press conferences to pressure the Fed to lower rates.
During his first term, Trump repeatedly explored whether he could fire or demote Powell. Legal experts and Fed officials maintained that under the Federal Reserve Act, the president cannot remove the Fed chair except "for cause," which has been interpreted narrowly and has never been tested through an actual removal. Trump publicly stated that he believed he had the authority to fire Powell but ultimately did not act on the threat during his first term.
The attacks intensified during Trump's second term. In April 2025, Trump posted on social media that Powell's "termination cannot come fast enough" and demanded immediate interest rate cuts. Every living former Federal Reserve chair joined with other past economic policy officials to condemn the pressure as an "unprecedented attempt" to interfere with central bank independence.
The escalation reached a new level in January 2026 when the Department of Justice served the Federal Reserve with grand jury subpoenas related to renovations at the Fed's headquarters building. Powell publicly stated that the investigation was a pretext and that "the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on its best assessment rather than following the president's preferences." Trump responded by calling Powell "that jerk" and declaring he would "be gone soon."
Powell has noted that, under the law, presidents may not fire or demote the Fed chair. Powell's term as chair is set to expire in May 2026.
The sustained pressure on the Fed has had measurable consequences. Financial markets have reacted to each escalation, and economists have warned that politicizing monetary policy risks higher long-term interest rates, dollar instability, and reduced investor confidence in U.S. institutions.
Primary Sources
1. Trump social media posts criticizing the Federal Reserve and Jerome Powell, 2018 through 2026
2. Trump press conference remarks and on-camera statements regarding the Fed, multiple dates
3. Federal Reserve Act, Section 10, regarding grounds for removal of Board members
4. DOJ grand jury subpoenas served on the Federal Reserve, January 2026
5. Jerome Powell public statements responding to DOJ investigation, January 2026
Corroborating Sources
1. NPR: "What to know about Trump's ugly feud with the Federal Reserve," January 13, 2026
2. CNBC: "Trump attacks Powell again amid Fed independence fears: 'That jerk will be gone soon,'" January 13, 2026
3. CNBC: "Fed Chair Powell says he's under criminal investigation, won't bow to Trump intimidation," January 12, 2026
4. NPR: "Trump keeps pressuring the Fed to cut rates. Here's why its independence matters," July 30, 2025
5. PBS NewsHour: "Trump criticizes Powell over interest rates, suggests he can remove Fed chair," 2025
Counterarguments and Context
Trump and his supporters argued that interest rates were too high and that Powell was making policy errors that were hurting American consumers and businesses. They contended that the president has a legitimate role in economic policy and that publicly expressing views on interest rates is different from issuing orders. Some commentators noted that other presidents, including Lyndon Johnson and Richard Nixon, privately pressured Fed chairs, and that Trump's public approach was merely a difference in style rather than substance. Regarding the DOJ investigation, the administration maintained that the probe concerned legitimate questions about the Fed's use of government funds for building renovations and was not connected to monetary policy disputes. Trump's defenders also argued that the Fed's independence is a convention, not a constitutional requirement, and that democratic accountability should extend to monetary policy decisions that affect millions of Americans. However, the distinction between private disagreements and sustained public campaigns to discredit and threaten a sitting Fed chair is significant. The use of a criminal investigation as leverage against the central bank goes beyond anything in modern presidential history and has been condemned by economists and former officials across the political spectrum.
Author's Note
Federal Reserve independence from political pressure is not an abstract principle. It is the foundation on which the credibility of U.S. monetary policy, the stability of the dollar, and the integrity of global financial markets rest. Every major economy that has experienced sustained inflation has had a central bank that was subordinated to political authorities. Trump's campaign against Powell, which escalated from public insults to threats of firing to a DOJ criminal investigation, represents the most aggressive attempt by a U.S. president to politicize the Federal Reserve since its founding in 1913. The fact that every living former Fed chair has condemned the conduct underscores how far outside historical norms these actions fall.