Trump Threat To Fire Fed Chair Powell Could Tank The Economy Even Faster

Fri 18 April 2025

WASHINGTON — President Donald Trump’s trade war against all comers is likely already bringing on a recession, and his threat Thursday to fire the chairman of the Federal Reserve Board is only making a bad situation worse, economists warned.

“It would be a ‘lunatics in charge of the asylum’ moment,” said Justin Wolfers, an economics professor at the University of Michigan, who predicted a shock to the system as big or even bigger than its reaction to Trump’s massive new tariffs. “Bond yields will rise probably as much as they did last week: 25-50 basis points. The dollar would fall. Stocks down 6%.”

“The Fed’s credibility is the foundation of international faith in the dollar,” said Douglas Holtz-Eakin, a conservative economist and former head of the Congressional Budget Office. “An attempt to fire Powell would make the financial market fallout of ‘Liberation Day’ looks like child’s play.”

White House aides did not respond to HuffPost queries. Trump himself raised the idea of firing Powell in a Thursday morning social media post attacking him for not lowering interest rates, even as his counterparts at the European Central Bank have done so.

“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!” Trump wrote, lying about grocery and egg prices being “down.”

During an Oval Office photo opportunity later in the day, Trump claimed that he had the ability to oust Powell. “If I ask him to leave, he will be out of there,” Trump said. “If I want him out, he will be out of there real fast, believe me.”

Jason Furman, once the top economic adviser in Barack Obama’s White House and now a Harvard economics professor, pointed out that markets reacted when Trump merely alluded to firing Powell in 2019, during his first term — barely a year after he had appointed him to the job — for not lowering interest rates as quickly as Trump wanted.

“Would be a huge, huge blow to markets if Trump tries to fire Powell,” Furman said. “In the first term you saw meaningful movements down and up even on hints of the possibility.”

Powell spoke at length on Wednesday about the uncertainty in the global and U.S. economies caused by the new tariffs, which levy a 10% import tax on most foreign goods, 25% on cars, aluminum and steel, and 145% on goods from China.

“These are fundamental changes in long-held policies in the U.S. There is not any real experience. Previous tariffs were not that strong and they were 95 years ago,” he said in remarks and a question-and-answer session at the Economic Club of Chicago.

Powell even referenced the 1986 movie “Ferris Bueller’s Day Off,” in which a high school history teacher famously explains that the 1930 Smoot-Hawley tariffs, rather than helping, instead plunged the economy into the Great Depression.

Trump appointed Powell, a mainstream conservative economist, as Fed chair in 2017, and he began his four-year term in 2018. Democratic President Joe Biden renominated him in 2022, meaning Powell should remain in office another year and is, by law, immune from political interference. Trump, however, during his second term has not been bothered by laws and has repeatedly violated them in an attempt to grab new powers.

Mike Davis, a former Senate lawyer whose advocacy of dictator-like presidential authorities has won Trump’s ear, said Trump surely has the right to fire Powell. “If the president does not have the authority to fire the Fed chairman, the office is unconstitutional,” he said.

An attempt by Trump to fire Powell may eventually be blocked by the U.S. Supreme Court, which Furman said seemed to be hinting that the Fed, indeed, is independent of the president in a ruling last year. But, he added, anything the justices might do would take time to play out, with the economy cratering in the meantime.

“But who knows what they would do. And regardless, it is not like it would be resolved instantly,” Furman said.

Bump

If Trump is able to fire him, no doubt it will be with a loyalist that will do the bidding of Trump.

That is more like a Russia style authoritarian style of government.

So it would allow Trump to manipulate markets for short-term gain, while sacrificing longer term goals.

I see the Wall Street Journal, who are more the traditional conservative ideology rather than MAGA, are in agreement. It targets a more educated audience.

In agreement with what?

Bump….this is the string that keeps giving. Looks like keeping Powell has tanked the economy Hysteria…Trump right again

At the moment Powell looks a bit daft...and that's putting it mildly..

It is a bit embarrassing when 2 days after you spend all the time talking about inflation it turns out the jobs data is all wrong. Everybody focuses on rates but underlying that is the shrinking of the Feds balance sheet $8.9 to $6.6 trillion. In a way that’s comforting to know…that the market can absorb $2.3 trillion. But taken together with higher interest rates this a recipe for starving the marginal project.

Tanking the market is now the new idiocy replacing the late and unlamented Russia Hoax promoted on site and the simultaneos statement "that the wall are closing in in the media that Trump will stay the rest of his life in jail because of Russian C ollussion in the 2016 and now it came out out that te organisation of the media campaign was led by and co=ordinated by the Obama Administration and his inner circle to try and destroy Trump's presidency - so the conspirtitors involved are going to face long prison sentences because of lies and propaganda they spread anderminming the Government elected by the peole.

So new topics are being discovered on a daily basis and the leftist are helping in that, The new term suddenly used by the media are "tanking the economy". So the situation is that with the support of the Srnate and after hearings the President Fed Ex Bank for ten year terms. The Prsident can fire the Chaiman if he does anything undermining the interests of the USA - but for that the House and Senate must support such a firing, There is a huge difference between saying something about firing of the Chairman and the issue will need congressional approvala d now such approval was sought on that one.

The "market tanking story" was spouted on site virtually on a daily basis. for the past six months and the economy is booming - so which of the sheisters on site must we believe when they try and proof otherwise?

“No. Mr. President,” Bernie Sanders, the Vermont senator, wrote. “In America, you do not fire the head of the Bureau of Labor Statistics for releasing a jobs report that you don’t like. That’s what authoritarians do. We need serious economists in these positions, not hacks who will only tell you what you want to hear.”

Berny is a Socialist Democrat nd not even a DP Senator - but an Independent. he is a millionaire himself based on his Senate Membership. His heroes were the Russian, Chinese, Cuban and Venezuelen Communist leaders,

The reason for the firing relates to falsification of job creation opportunities -same as the fired bugger did when Biden was President.. A regular was manipulated figures, For instance a regular occurred every month when Biden was President were inflated to say in one month 375 000 new jobs were created and the month later the figure is corrected to 75 000. The person is trying to disgrace the Trump A dministratin by reducing the actual number of new manuacturing jobs,

Another example was the stats released monhly by the FBI stating violent crime was being reduced - while violent crime increased the false stats showed it was decreasing. The bugger invovled in the case of the F BI was fired already.

In essense false stats is the main political issue in the USA and that is why the guy got fired. And dear Berny Sandes is effectively the leader of the Communit Party in the USA,

The above is the reason why the leaderless Democrats according to opinion polls their support base is now between 25 and 30% of the voters - the lowest suport number for the Democrats over the last century.