Jerome Powell, the president of the Federal Reserve, faces a fierce dam of a coalition of high -level figures threatening his mandate, which extends until May 2026.
In the past two weeks, President Donald Trump, federal housing financing agency (FHFA) Director Bill Pulte, the White House press secretary, Karoline Leavitt, the Congress Allies and the Treasury Secretary Scott Bessent all increased the attacks, accusing Powell of mismanagement, political bias and misleading conduct.
The cryptographic community, carefully, faces uncertainty when this coalition calls into question the future of Powell and the independence of the Fed.
Are Powell’s days numbered by the Fed chair, or can it resist this unprecedented storm?
Trump’s longtime quarrel
Trump, who appointed Powell in 2017, rekindled a quarrel that started during his first mandate when he criticized the rate increases as harmful to growth. He publicly planned to dismiss Powell in 2019, a position that degenerated after his re -election of November 2024.
On June 27, Trump called Powell as “tenacious mule”, accusing him of costing “hundreds of billions” by refusing to reduce interest rates, currently 4.25% to 4.5%. A handwritten note, published by Leavitt on June 30, demanded rate reductions, citing lower rates in Japan and China.
The federal reserve is an independent entity. While the president appoints the members of the board of directors and the congress confirms them, the board of directors is supposed to operate independently according to its own analyzes of tax issues. In addition, rate decisions are decided by a majority vote by the Fed Governors’ Council, not a single member – including the President.
On July 3, Trump urged Powell’s immediate resignation in a social post, alleging a fault related to the renovation of the $ 2.5 billion siege from the Fed (the project started long before Powell took over as president of the Fed in 2018). Despite occasional refusals of the dismissal plans, the mention by Trump of successors like Kevin Warsh or Christopher Waller signals an intention to reshape the management of the Fed.
The roots of this conflict are found in Trump’s first mandate, when he called Powell as big “enemy” than Xi Jinping in 2019, frustrated by rate increases that have slowed economic growth.
After winning the re -election on November 5, 2024, Trump intensified the pressure, with advisers like Kevin Hassett exploring shooting options after Powell refused to resign.
Pulte’s Housing Critique
The director of FHFA, Bill Pulte, fiercely criticized Powell’s broadband policies as a threat to the housing market.
On July 2, he demanded an investigation by the congress, alleging that the testimony of the Senate of June 25 of Powell concerning the renovation of the Fed of its headquarters in Washington, DC was “misleading” and reasons of withdrawal “for good”. Supported by senator Cynthia Lummis (R-Wyo.)Pulte said Powell has distorted features like a VIP dining room. Its X posts on June 24 and June 28 accused Powell of political bias and of inventing risk -ordered inflation risks, aggravating the unsuitable housing with mortgage rates from 6.6% to 7%. Powell said the characterizations of “luxury” renovations were not accurate.
Widen the campaign
Rick Scott and Tommy Tuberville Republican senators have amplified the pressure on the president of the Federal Reserve Jerome Powell, targeting the economic impact of his management.
On April 28, Scott criticized Powell for supervising an “inexplicable Fed” who, according to him, lost more than 2 billions of dollars and asked for $ 2.5 billion for a sumptuous headquarters, urging responsibility for what he described as reckless expenses. On June 17, he condemned Powell’s “horrible decisions”, which granted taxpayers while nourishing the surplus of public wages, which implies that Powell supported policies that hindered growth. Tuberville has repeatedly called for the dismissal of Powell, for example, on June 24.
On July 2, the judicial president of the house Jim Jordan (R-ohio) pointed out the opening to the examination of the president of the Federal Reserve Jerome Powell, responding to the call of the director of the FHFA, Bill Pulte, to a Congress survey on the management of Powell. According to a Fox Business report, while speaking to Bloomberg, Jordan noted that even if no specific plan for an investigation had been discussed, “everything is on the table” for surveillance, emphasizing the constitutional duty of the Judicial Committee of the Chamber to supervise the executive and judicial branches.
The secretary of the Treasury Scott Bessent, a potential successor of Powell, advised on June 30 and July 3 of the appointment of a new governor of the Fed in January 2026 or a new presidency in May 2026 at the end of Powell’s mandate. Warning against attempts at Powell dismissal due to risks on the market, such as a sale of 15% in April 2025 linked to Trump prices, support for the price of Bessent is aligned with the thrust of the administration.
Powell’s unshakable defense
Powell’s position is however fortified by legal protections.
The Federal Reserve Act authorizes withdrawal only “for good”, such as raw misconduct, reinforced by a recent decision of the Supreme Court protecting the Fed from arbitrary dismissal. Since Trump’s attacks in 2018, Powell has rejected political pressure as “noise”, reaffirming data -based policy.
The Fed held rates of 4.25% to 4.5%, citing Trump prices as a source of inflationary pressure, which should push personal consumption expenses Inflation around 3% in 2025, requiring a cautious policy to maintain 2% of long -term expectations.
During the FOMC press conference on June 18, Powell justified 4.25% detention rates to 4.5%, citing tariff inflation risks that could bring the PCE inflation to 3% in 2025 while highlighting the need for summer data to assess the price of consumer price.
Powell noted that the force of the economy – 4.2% unemployment and private interior growth of 2.5% – supports a cautious approach, but it has recognized the potential tension between employment and price stability if the prices cause persistent inflation.
He stressed that the maintenance of long -term inflation expectations anchored at 2% to avoid sustained price increases and, when questioned about political insults, have focused solely on the issuance of a “good solid American economy”.
The controversy of renovation lacks evidence of dismissal, but talking about a “ghost chair” could undermine the authority of Powell, creating a lame scenario.
A precarious path to come
The campaign of this coalition – Trump’s fiery rhetoric, Pulte housing criticism, the amplification of Leavitt, control of the congress and the succession plans of Bessent – creates a precarious environment. While the legal protections Powell shield, the administration’s push for a replacement in 2026 could make it a lame duck.
The question of whether Powell can sail in this storm while preserving the independence of the Fed remains uncertain, but its days, but not immediately numbered, are far from secure.
