Overview

• Trump has publicly attacked Powell over high interest rates and a $2.5 billion Fed headquarters overhaul and is exploring cause-based removal under the Federal Reserve Act
• The 1913 Fed law permits dismissing a chair only for misconduct, making any attempt subject to lengthy legal challenges
• Senators such as Thom Tillis and Mike Rounds have rallied behind the Fed’s political autonomy and cautioned that interference would erode market confidence
• Financial markets have shown increased volatility and bond yield shifts in response to removal threats, reflecting investor concern about central bank independence
• Speculation centers on potential successors—from Treasury Secretary Scott Bessent to economists Kevin Hassett, Kevin Warsh, Christopher Waller and Michelle Bowman—raising questions about the Fed’s future course