Trump’s frustration with Powell has escalated over the Fed’s reluctance to lower interest rates, which the president argues are “artificially high.” Speaking to reporters earlier this week, Trump accused Powell of stifling economic growth, saying rates should be “less than half” their current levels. His public complaints have included threats, social media insults, and renewed speculation that legal avenues might be explored to force Powell out.

Although Trump denied imminent plans to remove the Fed chair, economists remain concerned that the political pressure is undermining monetary policy. Recent market volatility has been attributed, in part, to fears that Trump could break with over a century of precedent respecting Fed independence.

Legal, Institutional Risks Loom Over Fed Conflict

While the president does not have the direct authority to fire the Fed chair without cause, legal analysts have warned that any attempt to do so could trigger a constitutional clash. The Federal Reserve operates independently, with Powell appointed to a fixed term that is protected by law.

Some Republican lawmakers have voiced quiet concern that the pressure campaign could destabilize financial markets. Meanwhile, Powell has maintained that the Fed will base its decisions solely on economic data, not political pressure.

The feud has become one of the defining tensions of Trump’s economic agenda as he campaigns for reelection and pushes for aggressive monetary easing.