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Donald Trump asked lawmakers whether he should fire Federal Reserve chair Jay Powell in a move that fuelled a fresh bout of concerns over the central bank’s independence and hit the dollar.
A White House official on Wednesday said Trump asked Republican members of Congress during an Oval Office meeting late the previous day whether he should remove Powell. Lawmakers supported the idea, the official said.
Trump later on Wednesday pushed back at the prospect that he would imminently sack Powell, who the president has relentlessly criticised in recent weeks for declining to cut interest rates.
“We’re not planning on doing anything,” Trump said in the Oval Office on Wednesday.
“I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud, and it’s possible there’s fraud,” the president added.
Trump said “almost every one” of the lawmakers he met on Tuesday signalled he should remove the Fed chair before his current four-year term ends in May 2026.
The dollar swung in volatile trading, with an index tracking the currency against its peers sliding as much as 0.9 per cent, before trimming its losses to roughly 0.3 per cent. The odds on prediction market Polymarket that Trump would fire Powell in 2025 shot up to as high as 40 per cent, before receding to 20 per cent before the president appeared to backtrack.
Speculation that Trump might fire Powell reached a fever pitch after Anna Paulina Luna, a Republican congresswoman from Florida, posted on X on Tuesday night that she was “hearing” that the Fed chair would be fired, and his sacking would be “imminent”.
Luna was among 11 House Republicans who met Trump in the Oval Office late on Tuesday as the president tried to win over their support for legislation that would create a regulatory framework for stablecoin issuers.
Republican Speaker of the House Mike Johnson, a staunch Trump ally who dialled into Tuesday’s Oval Office meeting by telephone, on Wednesday said he was “not sure” if Trump had the authority to fire Powell.
But Johnson added he believed “new leadership would be helpful at the Fed” and interest rates “need to be adjusted”.
Trump has insisted interest rates should be as much as 3 percentage points lower than their current levels of 4.25 per cent to 4.5 per cent, saying lower borrowing costs would help reduce the public debt burden of his “big, beautiful” budget bill.
However, Powell and many other members of the Fed’s policy-setting board are worried Trump’s tariffs could increase inflation. A report on Tuesday pointed to growing pressures on consumer prices.
The White House has recently also opened up a new front in its attack on Powell, with officials criticising a $2.5bn renovation of the central bank’s Washington headquarters.
Trump ally Russell Vought, director of the Office of Management and Budget, last week accused the Fed chair of “grossly” mismanaging an “ostentatious” renovation that was $700mn over budget.
Powell has described claims of excesses regarding the rebuild as “inaccurate” and said in congressional hearings that many of the features laid out in the original plans — including special elevators, beehives and roof terraces — had been scrapped.
Worries over the Fed’s independence have been bubbling on Wall Street. JPMorgan chief Jamie Dimon, one of the most influential executives in US finance, on Tuesday warned “the independence of the Fed is absolutely critical — and not just for the current Fed chair, whom I respect, Jay Powell, but for the next Fed chair”.
He added: “Playing around with the Fed can often have adverse consequences, the absolute opposite of what you might be hoping for.”
The Fed declined to comment.
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