Donald Trump says it is highly unlikely he will fire US Fed chair

President Donald Trump has said it is “highly unlikely” he will fire the chair of the US Federal Reserve, hours after asking lawmakers whether he should sack Jerome Powell.

Stock markets and the dollar slipped following reports Trump had broached the idea with Republicans on Tuesday but quickly bounced back after he downplayed the discussions.

Trump has repeatedly called on Powell to lower US interest rates in a series of highly critical outbursts.

The attacks escalated last week when Trump allies accused Powell of mismanaging the renovation of Fed properties.

On Wednesday, Trump continued his criticism of Powell – who the president appointed during his first term – calling him a “knucklehead” and claiming he was “doing a lousy job”.

He acknowledged that he had revived discussions about firing Powell, after appearing to shelve the idea earlier this year, but said he was “not planning on doing anything”.

Pressed on whether he was ruling out the idea, he said: “It’s highly unlikely unless he has to leave for fraud.”

Powell’s second term as Fed chair ends in May next year. He can stay on as a governor of the central bank until 2028.

The Federal Reserve was established by Congress and has powers to set policy independent of the White House.

Powell has denied that the president has the authority to fire him, especially over a policy disagreement, but White House officials have said he can be removed for cause.

Treasury Secretary Scott Bessent said earlier this week that a “formal process” was under way to identify a replacement for Powell.

Trump has floated Bessent as a candidate. Others in the running include Kevin Hassett, who currently leads Trump’s National Economic Council, and conservative economist Kevin Warsh.

Powell was nominated to lead the Fed by Trump in 2017, replacing Barack Obama’s appointee Janet Yellen.

Former President Joe Biden extended his term in 2021.