WSJ editorial board urges Trump not to fire Powell
The Wall Street Journal editorial board on Wednesday urged President Trump not to follow through on his threat to fire Federal Reserve Chair Jerome Powell, warning the consequences would be worse than the status quo.
“It’s often hard to know when President Trump is serious about something, or merely creating a distraction. But in case he really meant it this week when he told Republican lawmakers he may fire Federal Reserve Chair Jerome Powell, we have some advice: Don’t do it,” the board wrote in an editorial published Wednesday evening.
The board acknowledged Trump’s frustrations with Powell, who has resisted Trump’s calls for additional rate cuts and has repeatedly noted the need for the Fed to monitor any potential inflationary consequences from Trump’s tariffs.
“But love or loathe Mr. Powell, Mr. Trump chose him,” the board added. “Mr. Trump also chose the tariff taxes, and a multitude of no-growth tax and spending handouts in the new budget bill. Now the President has to live with his choices.”
The board also noted that there isn’t a clear alternative to Powell and that “Powell has signaled that he and the Fed would sue to block any attempt to remove him prematurely.”
“He’d likely win,” the board wrote. “Although the Supreme Court recently has expanded a President’s control over appointments to quasi-independent agencies, the Justices have made clear they view the Fed as an exception.”
The board urged Trump to show “some uncharacteristic restraint” and noted the importance of Powell appearing to be independent from the White House.
“Mr. Powell probably would prefer to cut rates this year, data allowing. But he understands that to defend the Fed’s institutional independence he can’t be seen acceding too readily to White House pressure,” the board wrote. “Mr. Trump makes it harder for the Fed to do what he would like every time he pops off about Mr. Powell.”
“It’s in everyone’s interests, including Mr. Trump’s, that markets perceive that person as a serious policy-maker and not an Oval Office pushover,” the board added. “Some uncharacteristic restraint from Mr. Trump now makes it easier for his preferred candidate to maneuver later.”
The stock market continuously bounced up and down on Wednesday amid conflicting reports about whether Trump was poised to oust the Fed chair. Powell’s term as chair is scheduled to end in May 2026, and his term as a member of the Fed’s board of governors ends in 2028.
Trump waved around a draft of a dismissal letter for Powell at a meeting with about a dozen House Republicans in the Oval Office on Tuesday night, polling the attendees on whether he should drop the axe on the embattled Fed chair, according to a report in The New York Times.
Trump then backed away from the threat Wednesday, telling reporters at the White House: “We’re not planning on doing anything.”
But he didn’t take the option off the table, saying, “I don’t rule out anything, but I think it’s highly unlikely. Unless he has to leave for fraud.”
Republican senators have warned Trump against taking action against the Fed chair, warning he likely lacks the authority and that doing so would send a “shock wave” through the economy.