GOP Senators Warn Against Trump's Potential Firing of Fed Chair Powell
Washington, D.C., Thursday, 17 July 2025.
Amidst swirling rumors, GOP senators caution President Trump that firing Federal Reserve Chair Jerome Powell could destabilize financial markets, fearing a significant negative impact on the economy ahead of the elections.
Implications of Firing Powell on Market Stability
Republican senators, aligned and opposing Trump, have stressed the significant financial uncertainties that could follow if Federal Reserve Chair Jerome Powell were fired. GOP lawmakers, including Sen. John Kennedy (R-La.), have underscored that dismissing Powell would potentially ‘crash the stock market’ by disrupting interest rate policies vital for economic stability [1].
Legal and Political Hurdles in Firing Jerome Powell
Several GOP members have highlighted the legal challenges Trump might face, as Federal law permits removing a Fed chair only ‘for cause,’ implying severity like fraud [2]. This condition poses a hurdle since Trump’s complaints, primarily about the pace of interest rate reductions and a costly renovation project at the Fed, lack a fraud basis [3].
Trump’s Fluctuating Stance
Despite earlier suggestions of Powell’s termination, Trump recently described it as ‘highly unlikely’ unless laws were breached [4]. However, his mixed messages, like presenting a draft firing letter to House Republicans, fuel market speculations and investor fears [5][6].
Market Reactions and Strategic Concerns
Financial experts have warned that ousting Powell could lead to an equity selloff and elevate long-term yields amid broader fears concerning Fed independence [7]. Analyst Wolfe Research forecasts that such actions could provoke negative trends contrary to desired economic outcomes [8].