How Trump’s repeated efforts to fire Federal Reserve Chair Powell harm the economy – and make battling inflation harder

President Donald Trump has again threatened to oust Federal Reserve Chair Jerome Powell, putting at risk a keystone of good economic policy and inflation management: central bank independence. The president said on April 15, 2026, that he would fire Powell if the Fed chair stayed on in that role after his term officially ends on May 15. Powell has said he intends to remain at the helm after that if his replacement has not yet been confirmed by the Senate. Legally, Powell is allowed to do this. Trump has promised to fire Powell a number of times, and his Department of Justice has launched a criminal investigation into renovations at the Fed building. Trump has also tried to oust another Fed governor, Lisa Cook, over allegations of mortgage fraud. In an unprecedented video response to the investigation, Powell called it and other actions “pretexts” for Trump’s ultimate goal of getting the Fed to lower interest rates. While Trump’s actions are seen as particularly aggressive, as political economists, we are not surprised to see politicians try to exert influence on central banks. For one thing, central banks remain part of the government bureaucracy, and independence granted to them can always be…

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