An Attack Foretold - How Trump Plans Jerome Powell's Ouster and Fails at the Constitutional Line

It is perhaps the most explosive power struggle within the American financial system - and one that grows sharper with each passing week: Donald Trump, back in the White House, is openly searching for ways to remove Federal Reserve Chairman Jerome Powell from office. But what at first glance appears to be a calculated move against rising interest rates and a supposedly "anti-Trump" monetary policy reveals itself upon closer inspection as an institutional powder keg. For the attempt to prematurely dismiss Powell could not only ignite a legal firestorm - it would also challenge the fundamental principle of the Federal Reserve’s independence in a way the United States has never experienced.

Powell himself has left no doubt about how he would assess such an attack: "My removal is not permitted by law," he declared at the beginning of the year - and made it clear that he would remain in office even if Trump tried to fire him. The legal foundation lies in the Federal Reserve Act of 1935, which sets the term of Fed governors at 14 years and allows for their removal by the president only "for cause." That phrase - as vague as it is significant - has rarely been clearly defined in court. What counts as sufficient cause? Mismanagement? Corruption? Or is an unwelcome renovation of the Fed's headquarters in Washington already enough? This is precisely the point Trump is now targeting. With his usual aggressive rhetoric, he accuses Powell of possibly committing "fraud" during the multi-billion-dollar renovation of the Fed's headquarters. A charge as unfounded as it is calculated - but one that could potentially open the legal door to a "for cause" case. Already during Trump's first cabinet, the White House had secretly commissioned legal opinions on whether the Fed chair could be dismissed prematurely. Now they seem more determined than ever to put this into action. But Powell is pushing back. He has involved the Fed’s inspector general, released a detailed cost breakdown, and vehemently denied any "VIP facilities" in the new building. The responsibility for handling public funds is taken very seriously, Powell wrote in a letter to Trump's budget director - a sentence that reads like a declaration of war.

The legal front lines are anything but clear. While the Supreme Court recently allowed Trump to dismiss two board members of other independent agencies - reasoning that they exercised executive authority - just days later a district court in Washington ruled that Trump’s removal of FTC Commissioner Rebecca Slaughter was illegal, citing a nearly 90-year-old precedent: Humphrey’s Executor v. United States. Back then, the Supreme Court held that the president may remove members of independent regulatory agencies only if they prove to be inefficient, neglectful of duty, or corrupt. The Federal Reserve, under that interpretation, is such an independent body - and Powell is accordingly protected. But Trump sees it differently. He not only wants to change the Fed’s monetary policy but also break its structural autonomy. The goal is obvious: lower interest rates, increased credit availability - and an economic boost that lifts poll numbers just in time for the 2026 election. That the Fed has acted cautiously since the start of the year, keeping the federal funds rate between 4.25% and 4.50% and awaiting new economic data, is not enough for the president. He demands a rate cut - if necessary through direct pressure on Powell. Publicly, he declared Powell’s dismissal "can’t come fast enough," called him a "total loser," and had economic advisor Kevin Hassett explore whether a legal "path could be found."

But even in Trump's inner circle, few believe in a legal victory. According to Politico, outside legal experts have advised the White House that such a move would likely fail - at least as long as there is no hard evidence of misconduct. One advisor is quoted as saying, "Whether it’s illegal, I don’t know. But is it useful for damaging Powell? Absolutely." That sentence says much about the political strategy behind it. The focus is not on the removal itself - but on the media assault, the systematic dismantling of Powell’s reputation, which Trump loves to embed in "deep state" narratives. Powell’s term ends in May of next year anyway. Most observers assume Trump will no longer take the political risk of a direct dismissal. The end of the term is too near, the outcome of a legal battle too uncertain. But institutional erosion is already underway. The fact that a president openly threatens to remove a central bank chief - and resorts to fabricated accusations - sets a dangerous precedent. The independence of the Federal Reserve was once an untouchable principle. Today it is just another battlefield in America’s culture war - a playing field where the president is willing to risk everything just to win.

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