“The law is quite clear,” says Dan Urman, director of the law and public policy minor at Northeastern University.
Can President Donald Trump legally fire Jerome Powell, chair of the Federal Reserve of the United States?
Raised in the aftermath of the 2024 presidential election, the issue now faces a reality check.
The president reportedly drafted a letter effectively firing Powell that he shared with House Republicans during a meeting this week. According to the New York Times, Trump confirmed he discussed the matter with colleagues, but noted there were “no imminent plans to do so.”
Trump has expressed dissatisfaction with Powell over the fact that he has kept interest rates high — that he has been, in the president’s words, “too late” — which has prompted Trump to double down on threats to remove him.
The law establishing the modern Federal Reserve is called the Federal Reserve Act of 1913. It states that the Federal Reserve Board of Governors — including the chair, who is selected from among them — can only be removed by the president “for cause.”
“In legal terms, this usually means serious misconduct, which is not present here,” Dan Urman, director of the law and public policy minor at Northeastern University, who teaches courses on the Supreme Court. “Powell could ultimately go to court if he were removed and would likely prevail, even if it went up to the Supreme Court.”
Congress can amend the Federal Reserve Act — and has done so over the years.
Trump has floated the idea of Powell being removed “for cause” because of cost overruns on the central bank’s $2.5 billion headquarters renovation project that is underway.
The removal of Powell would also likely have ramifications for the U.S. economy.
Powell was appointed to the Federal Reserve Board of Governors by President Obama in 2012 and was later nominated by Trump to succeed Janet Yellen as chair in 2018.
The chair of the Federal Reserve is appointed by the president and serves a four-year term. Powell’s chairmanship is set to end in May 2026.
The Supreme Court established in Humphrey’s Executor v. United States that President Franklin Delano Roosevelt couldn’t fire a member of the Federal Trade Commission (FTC) over a policy dispute, noting the independence of federal agencies tasked with carrying out “quasi-judicial and quasi-legislative” duties.
In other words, the president cannot remove Powell — or the heads of similarly structured agencies, such as the FTC or Securities and Exchange Commission — for political reasons.
When asked about whether Trump could fire him in November, Powell said: “Not permitted under the law.”
As far as Urman is concerned: case closed.
“This is one of those cases where there isn’t too much legal wiggle room,” Urman says. “The law is quite clear.”