Former Commerce Secretary Wilbur Ross believes that President Donald Trump attempting to unseat Federal Reserve Chair Jerome Powell would result in a lengthy legal battle and few benefits for the president.
In an interview with Newsweek last week, Ross said he does not think Trump intends to fire Powell. Asked whether Trump should, Ross responded: “I don’t think it’s a question of should.”
“Powell’s term expires mid-year next year. So he’s not going to be in for very long in any event,” he said. “And if Trump went to fire him, no doubt it would end up in court, and to get a decision like that, which undoubtedly would end up in the Supreme Court, to try to bring that to a decision in less than a year is very unlikely.”
“So I’m not so sure that even if he wanted to do it. And even if he were able to ultimately convince the court that he has the power to do it, I’m not sure he’d save very much time.”
Why It Matters
Talk of Powell’s resignation, or the president firing him before his term ends in May 2026, stems from a dispute over the Federal Reserve’s reluctance to cut interest rates from the current target range of 4.25–4.50 percent.
Since the beginning of his second term, Trump and certain members of his cabinet have called for sizable rate cuts to stimulate economic growth and reduce the interest the United States pays on its debt. However, the central bank has repeatedly stated that it will remain in “wait-and-see” mode until there is greater clarity on the trajectory of inflation and until the full impact of Trump’s tariffs on the U.S. economy is understood.
Firing Powell from his Senate-confirmed post would mark a significant departure from the Fed’s historically recognized independence, and it would likely raise questions about the stability of the U.S. economy.
John Lamparski / Andrew Harnik/Getty Images for Concordia Summit / Getty Images
What To Know
Trump has taken to calling Powell, who chairs both the Fed’s Board of Governors and its Open Market Committee, “too late Powell” over his decision to hold rates steady at successive monetary policy meetings, while also dubbing him a “stupid person” and “Trump Hater.” However, the president’s messaging on whether he intends to oust Powell has been mixed.
Speaking to reporters in the Oval Office last week, Trump said that lowering interest rates by three percentage points would save the government $1 trillion in debt payments, and that he had spoken with Republican members of Congress about the possibility of firing the Fed chair.
“Almost every one of them said I should, but I’m more conservative than they are,” Trump said.
“I don’t rule out anything,” he added, “but I think it’s highly unlikely.”
According to Section 10 of the Federal Reserve Act, the president can remove any member of the Fed’s Board of Governors “for cause,” which is widely interpreted to mean serious misconduct or malfeasance in office. However, past Supreme Court cases have determined that this cannot be done for simple policy disagreements, i.e., over whether and when to adjust interest rates.
Last week, Trump suggested that Powell could be forced to resign “for fraud,” pointing to the recent $2.5 billion renovation of the Fed’s Washington, D.C. headquarters.
In a recent letter to Powell, Russ Vought, director of the Office of Management and Budget (OMB), called the renovations an “ostentatious overhaul,” and said that statements made by Powell during his testimony before the Senate Banking Committee in June raised “serious questions” about the project’s compliance with the federal guidelines.
In his response, Powell said: “We have taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2017.”
As well as the oversight it has already been subject to, Powell said he had asked the Federal Reserve’s independent Inspector General “to conduct a fresh review of the project.”
Even if the allegations of fraud were substantiated and the Trump administration made formal attempts to remove him from his post, Powell would be able to contest this decision.
As Ross told Newsweek, Powell’s tenure could end before the case was fully resolved in the form of a Supreme Court ruling. However, in the case of a preliminary injunction, Vice Chair Philip Jefferson would assume Powell’s duties during the dispute.
During a press conference shortly following the presidential election, Powell said that it was “not permitted under law” for the president to demote or fire governors or those holding leadership positions within the Fed. When asked whether, if asked by Trump, he would resign from his post, Powell responded bluntly: “No.”
What People Are Saying
President Donald Trump, speaking to reporters about Powell last week: “Fortunately, we get to make a change in the next, what, eight months or so, and we’ll pick somebody that’s good and we’ll pick somebody. I just want a fair job. We want to see lower interest rates. Our country deserves it. We’re making a lot of money. We’re doing great as a country.”
Commerce Secretary Scott Bessent told Fox Business this week: “I know Chair Powell. There’s nothing that tells me that he should step down right now. He’s been a good public servant. His term ends in May. If he wants to see that through, I think he should. If he wants to leave early, I think he should.”
Federal Reserve Chair Jerome Powell, at a European Central Bank forum in Portugal on July: “I’m very focused on just doing my job. I mean, there are things that matter—using our tools to achieve the goals that Congress has given us: maximum employment, price stability, financial stability. And that’s what we focus on 100 percent.”
What Happens Next
In an interview with Bloomberg Television this week, Bessent said a “formal process” for identifying Powell’s successor had begun. “It’s President Trump’s decision, and it will move at his speed,” he added.
Economists who previously spoke to Newsweek said they anticipate the Fed cutting rates by the end of the year at the latest. These cuts, they said, could range from one 25-basis-point cut to several of this size.
