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Senator Elizabeth Warren, representing Massachusetts, expressed concerns on Thursday regarding the stability of U.S. financial markets should President Donald Trump gain the authority to dismiss Federal Reserve Chairman Jerome Powell.
Warren’s remarks, made during an appearance on CNBC’s “Squawk on the Street,” followed Trump’s outspoken criticism of Powell, stating that the Fed chair’s “termination cannot come fast enough!”
A senior official from the White House later clarified to CNBC that Trump’s comments should not be interpreted as a direct threat to Powell’s position, emphasizing that there are no existing plans to remove him before his term concludes.
Powell himself has stated previously that the president lacks the capability to fire him from his role.
During her address at the New York Stock Exchange, Warren acknowledged her ongoing disagreements with Powell over regulatory issues and interest rate policies. However, she emphasized that allowing a president to terminate the Fed chair would lead to a significant downturn in U.S. markets.
“The foundation of our stock market—and by extension, the global economy—is the understanding that major economic decisions operate independently of political whims,” Warren explained. She cautioned that if critical financial mechanisms could be influenced at the president’s discretion, it would undermine the institutional integrity of the U.S. economy, reducing it to the level of “any other two-bit dictatorship around the world.”
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Trump has consistently targeted Powell in his critique, urging the central bank to lower interest rates in an effort to stimulate economic growth. Under President Joe Biden, the Federal Reserve raised rates to combat rampant inflation stemming from the COVID-19 pandemic, but began to reverse these increases in 2024.
Despite calls for rate cuts, the Fed, under Powell’s leadership, has indicated that it is cautious about making further adjustments, citing uncertainties caused by Trump’s unpredictable tariff policies. Powell reiterated this caution during a speech at the Economic Club of Chicago, noting that the president’s tariffs could hinder economic progress.
In a recent post on Truth Social, Trump criticized Powell as being “always TOO LATE AND WRONG,” while reiterating his support for his extensive tariff strategy. He asserted that Powell should have enacted rate reductions “long ago” and insisted that action should be taken immediately. Trump’s post concluded with his statement that “Powell’s termination cannot come fast enough!”
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