Jerome Powell during a House Financial Services Committee hearing on February 12, 2025. Photo: Daniel Heuer/Bloomberg/Getty Images
At the start of his second term, Donald Trump has been leaning into two of his favorite negotiation tactics: hurling threats and bestowing dumb nicknames on his adversaries. The effectiveness of these strategies is debatable. While plenty of people and institutions have caved when faced with Trump’s childish behavior, the president labeling those worried about tariffs as “Panicans” didn’t prevent market chaos, and Canada remains resistant to becoming the 51st state.
Nevertheless, Trump is now trying these strategies on Jerome Powell. In a Thursday morning Truth Social post, he called the Federal Reserve chair “Too Late,” explaining that he came up with this brilliant nickname because he’s “TOO LATE AND WRONG.” He closed with the line, “Powell’s termination cannot come fast enough!”
It was not clear if Trump was threatening to “terminate” Powell or merely musing that he’s excited for the end of his term in May 2026. And it’s also unclear if Trump can fire Powell. The Fed is an independent government agency established by Congress. As ABC News noted, Powell (and many others) believe Trump can’t fire him:
In November, days after Trump’s election victory, Powell struck a defiant tone when asked whether he would resign from his position if Trump asked him to.
“No,” Powell said, pausing to let the one-word answer register with the reporters assembled at a press conference at the Fed headquarters, blocks away from the White House.
When asked whether Trump could fire or demote him, Powell responded: “Not permitted under the law.”
The Federal Reserve Act says Powell and other Fed governors can only be dismissed for cause. And the U.S. Supreme Court blocked FDR from firing members of the Federal Trade Commission for political reasons. But the Trump administration is currently challenging the precedent set in that 1935 case — Humphrey’s Executor v. United States — arguing that the president should be able to fire any federal-agency head. The Wall Street Journal reports:
But in February, the Trump administration said the court should overturn that precedent, dubbed Humphrey’s Executor, for intruding on the president’s control over the executive branch. Trump then forced the matter by firing a Democratic member of the National Labor Relations Board and a Democratic member of the Merit Systems Protection Board.
Both sued, arguing that the firings were illegal. Chief Justice John Roberts has let the firings stand while the court considers the dispute. He asked both sides to submit briefs by the end of this past Tuesday.
The justices might first rule only on whether the plaintiffs should get their jobs back, and settle the merits of the case later. The court’s conservative majority is known to look skeptically upon Humphrey’s Executor.
During a Wednesday interview at the Economic Club of Chicago, Powell said he doesn’t think that case will affect the Fed even if the Court rules in Trump’s favor, since “generally speaking, Fed independence is very widely understood and supported in Washington — in Congress, where it really matters.”
As The Wall Street Journal explained, ending the central bank’s independence would cause huge economic chaos:
Investors would henceforth conclude that monetary policy no longer solely reflects the Fed’s judgment about inflation, employment and financial stability, but also the president’s priorities.
That could inject dramatically more uncertainty and volatility into financial markets.
So, will Powell really respond to Trump throwing a tantrum on Truth Social? Or will the president hurling a dumb nickname convince Supreme Court justices that they should give him the power to “terminate” the Fed chair even if it risks an economic meltdown? Guess we’ll find out!
Daily news about the politics, business, and technology shaping our world.
Vox Media, LLC Terms and Privacy Notice
By submitting your email, you agree to our Terms and Privacy Notice and to receive email correspondence from us.
