Senator Elizabeth Warren warns that markets could plummet if Trump gains the authority to dismiss Fed Chair Powell.
Sen. Elizabeth Warren, D-Mass., warned Thursday that U.S. markets will “crash” if President Donald Trump has the authority to fire Federal Reserve Chair Jerome Powell. Warren, who has often criticized Powell, made her comments on CNBC’s “Squawk on the Street,” shortly after Trump stated on social media that the Fed chair’s “termination cannot come fast enough!” A senior White House official later indicated that Trump’s remarks should not be interpreted as a direct threat to dismiss Powell and that there are no plans to end his term prematurely.
Powell has previously noted that the president does not possess the power to fire him. “I have tangled with [Powell] on a regular basis about both regulations and interest rates,” Warren acknowledged during her remarks at the New York Stock Exchange. “But understand this: If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States,” she stated.
As the ranking member on the Senate Banking Committee, Warren expressed that the foundational support of the stock market—and by extension, the global economy—lies in the belief that major economic elements operate independently of political influences. If significant economic levers are “subject to a president who just wants to wave his magic wand,” then the U.S. would become indistinguishable “from any other two-bit dictatorship around the world,” she cautioned.
Trump has consistently pointed out Powell by name, urging the U.S. central bank to decrease interest rates in hopes of stimulating rapid economic growth. The Fed increased rates during President Joe Biden’s term to combat soaring inflation spurred by the coronavirus pandemic and began reducing them in 2024. However, the Fed has emphasized that it is not in a rush to continue those cuts, citing the uncertainty created by Trump’s fluctuating tariff policies. Powell reiterated this position on Wednesday in a speech at the Economic Club of Chicago, mentioning that the president’s import taxes are “likely to move us further away from our goals.”
In a post on Truth Social Thursday morning, Trump defended his broad tariff plans and criticized Powell as being “always TOO LATE AND WRONG.” He asserted that Powell should have lowered rates “long ago, but he should certainly lower them now,” adding, “Powell’s termination cannot come fast enough!”— Reporting contributions from Megan Cassella and Fred Imbert also acknowledged.
