Sen. Elizabeth Warren, D-Mass., warned Thursday that U.S. markets will “crash” if Federal Reserve Chairman Jerome Powell can be fired by President Donald Trump.
The comment from Warren, a frequent Powell critic, on CNBC’s “Squawk on the Street” came hours after Trump griped that the Fed chair’s “termination cannot come fast enough!”
A senior White House official later told CNBC that Trump’s broadside should not be seen as a threat to fire Powell, and that there are no plans being made to end his term early.
Powell has previously said the president does not have the power to fire him.
“I have tangled with [Powell] on a regular basis about both regulations and interest rates,” Warren acknowledged in 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 said.
Warren, the ranking member on the Senate Banking Committee, explained that the “infrastructure” upholding the stock market — and therefore the global economy — is “the idea that the big pieces move independent of the politics.”
If key economic levers are “subject to a president who just wants to wave his magic wand,” then the U.S. will be indistinguishable “from any other two-bit dictatorship around the world,” she said.
Trump has repeatedly singled out Powell by name while urging the U.S. central bank to lower interest rates in hopes of spurring rapid economic growth.
The Fed hiked rates during President Joe Biden’s presidency in order to tamp down the rampant inflation induced by the coronavirus pandemic, but started dialing them back in 2024.
But the Fed under Powell has said it is in no hurry to continue those cuts, pointing to the uncertainty created by Trump’s shape-shifting tariff policies. Powell reiterated that stance Wednesday in a speech at the Economic Club of Chicago, saying the president’s import taxes are “likely to move us further away from our goals.”
In a Truth Social post Thursday morning, Trump slammed Powell as being “always TOO LATE AND WRONG” while defending his wide-ranging tariff plans.
Powell should have lowered rates “long ago, but he should certainly lower them now,” Trump wrote. “Powell’s termination cannot come fast enough!”
— CNBC’s Megan Cassella and Fred Imbert contributed to this report.
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