Senator Elizabeth Warren, a Democrat from Massachusetts, expressed serious concerns on Thursday regarding the potential instability in U.S. markets if President Donald Trump were to have the authority to dismiss Federal Reserve Chairman Jerome Powell.
Warren’s remarks came during an appearance on Finance Newso’s “Squawk on the Street” shortly after Trump publicly criticized Powell, claiming that the Chairman’s “termination cannot come fast enough!”
A senior official from the White House later clarified to Finance Newso that Trump’s comments should not be interpreted as a direct threat to Powell’s position and emphasized that there are currently no discussions regarding his premature removal from office.
Previously, Powell has stated that the President does not possess the power to remove him from his role.
“I have tangled with [Powell] on a regular basis about both regulations and interest rates,” Warren stated during her remarks at the New York Stock Exchange.
However, she warned, “If Chairman Powell can be fired by the President of the United States, it will crash markets in the United States.”
As the ranking member of the Senate Banking Committee, she elaborated that the essential “infrastructure” supporting the stock market—and, by extension, the global economy—relies on the notion that significant economic influencers operate independently of political pressures.
Warren cautioned that if vital economic mechanisms are “subject to a president who just wants to wave his magic wand,” the U.S. risks becoming “indistinguishable from any other two-bit dictatorship around the world.”
Throughout his presidency, Trump has consistently targeted Powell, urging the U.S. central bank to reduce interest rates in a bid to promote rapid economic growth.
Although the Federal Reserve raised rates during President Joe Biden’s administration to curb inflation exacerbated by the pandemic, it has recently begun to lower them again.
However, Powell and the Fed maintain that they are not hastening these cuts, citing uncertainty stemming from Trump’s shifting tariff policies. Reiterating this position, Powell stated in a speech at the Economic Club of Chicago that the President’s import tariffs are “likely to move us further away from our goals.”
In a recent post on Truth Social, Trump criticized Powell, declaring him “always TOO LATE AND WRONG” while defending his extensive tariff strategies.
Trump contended that Powell should have lowered rates “long ago, but he should certainly lower them now,” and concluded with his assertion that “Powell’s termination cannot come fast enough!”
— Finance Newso’s Megan Cassella and Fred Imbert contributed to this report.
