Trump threatens Powell, Warsh nomination faces resistance

Trump vows to fire Powell if he stays past May, citing dissatisfaction and a DOJ probe. Warsh’s nomination faces Senate resistance, fueling market uncertainty and debate over Fed independence.

Donald Trump has intensified his criticism of Federal Reserve Chair Jerome Powell, stating in several interviews that he will fire Powell if he does not step down when his term ends in May. Trump expressed dissatisfaction with Powell’s performance and pointed to the ongoing Justice Department investigation into Powell and the Federal Reserve’s headquarters renovation project. Trump has nominated Kevin Warsh as Powell’s successor, but Warsh’s confirmation faces significant obstacles in the Senate. Lawmakers are demanding that the DOJ inquiry into Powell be resolved before moving forward. This standoff has heightened political and market uncertainty. Analysts warn that threats to the Fed’s independence could increase risk premiums on the US dollar and add to market volatility. Prediction markets show mixed expectations for Warsh’s confirmation, with probabilities ranging from 43% to 95%. The debate over presidential authority and the Fed’s independence continues to intensify.