Trump: If Powell Stays Past His Term, He Will Be Fired; Rates May Fall Under Warsh

The position of Federal Reserve Chair remains unresolved, with tensions between the White House and the central bank evolving into a potential legal and institutional confrontation. On the 15th, Trump stated that if Powell continues to serve after his term expires, he will be fired. Powell's term as Chair is set to expire on May 15 (though if he remains a Governor, his term extends to January 2028). However, since Kevin Warsh, Trump's nominee for successor, has not yet been confirmed by the Senate, Powell previously made it clear he would continue to serve in accordance with the law until his successor takes office. In an interview, Trump was direct in his wording: "If he doesn't leave, I will have to fire him." This statement has plunged the transition of power at the Fed Chair's office into uncertainty and further intensified market concerns over the Fed's independence. At the same time, Trump indicated he does not intend to abandon his investigation into Powell and hopes Warsh will be smoothly confirmed. According to the "Fed Whisperer" Nick Timiraos, a third legal battle between the Trump administration and the Federal Reserve may still erupt. Power Vacuum Created During Transition Gap The time lag between Powell's term expiration and Warsh's Senate confirmation is the core of the current controversy. According to Federal Reserve regulations, if a successor is not ready in time, the incumbent Chair can continue serving in the capacity of "Acting Chair," a clause Powell himself has cited as the basis for staying in office. An earlier article from Wallstreetcn noted that on April 21, Fed-nominated Chair Warsh was scheduled to attend a confirmation hearing held by the Senate Banking Committee. Warsh requires confirmation by both the Senate Banking Committee and the full Senate to succeed Powell, who steps down on May 15. Trump's hardline stance means that if delays occur in Warsh's confirmation process, the confrontation between the two sides could quickly escalate from the political to the legal level. Currently, Trump has publicly expressed his expectation for Warsh's confirmation, but the Senate review process is not yet complete. Rising Risk of Legal Confrontation, Fed Independence Under Pressure According to Nick Timiraos, the Trump administration previously failed in two legal actions involving the Federal Reserve—neither successfully summoning relevant personnel nor firing Fed Governor Lisa Cook. This background leads outsiders to take a cautious view regarding whether the White House can forcibly push Powell out of office. Analysts believe that firing the Fed Chair faces significant legal hurdles, and related litigation could become the main battleground in the next phase of the game between the White House and the Fed. The previous setbacks for the Trump administration in the judicial arena suggest that any forced action could trigger a protracted legal tug-of-war. Trump's public pressure on Powell has persisted for months, covering multiple dimensions including monetary policy direction, interest rate decisions, and investigations into Powell personally. This "threat of firing" is the most direct statement so far, marking that the rift between the White House and the Fed has become increasingly public. The Fed's independence has long been regarded as a crucial cornerstone for maintaining the credibility of monetary policy and stabilizing financial market expectations. The evolution of the current situation will directly impact investors' assessment of the Fed's future policy direction and its institutional credibility.