Donald Trump is unhappy with the head of the U.S. central bank.

Here’s why: Powell, who hurriedly cut federal interest rates by 75 basis points ahead of the 2024 election, has been reluctant to ease monetary conditions further, citing potentially inflationary effects of the White House’s new tariff policies.

Trump has been floating the idea of firing him for a while now. The regulator, for his part, has maintained since November that Trump lacks the legal authority to do so. Powell’s term is slated to end in May 2026 in any case.

"Jerome Powell has been very bad for our country," Trump said over the weekend. "We should have the lowest interest rate on Earth, and we don’t. He just refuses to do it."

The coalition against Powell appears to be growing by the day. The director of the Federal Housing Finance Agency (FHFA), Bill Pulte, has accused the chairman of political bias and called for a congressional investigation into his leadership.

Republican members of Congress (such Senators Rick Scott and Tommy Tuberville, and House Judiciary Chair Jim Jordan) have, too, criticized Powell’s actions over the past few months.

Then there’s Kevin Warsh, a former Federal Reserve governor — and potential Powell replacement — who says that it’s time for “regime change” at the Fed. (I’m only naming a few people, but the list is long.)

Now, the Federal Reserve is technically independent, so Powell is protected from arbitrary dismissal and can only be removed “for cause,” meaning there needs to be a serious, legally justified reason to fire him.

Powell’s critics are now using the Federal Reserve’s $2.5 billion headquarters renovation as a new angle of attack, alleging potential misconduct or that Powell misled Congress in his testimony regarding the renovation. (The project was set in motion years before Trump appointed Powell in 2018.)

The pressure has increased even more in the last couple of days. Treasury Secretary Scott Bessent said on Tuesday that a “formal process” to replace Powell was underway. A few hours later, Congresswoman Anna Paulina Luna tweeted that Powell’s firing was “imminent,” sending Polymarket odds of the event to 27%.

The rumors did not abate on Wednesday. Bloomberg and CBS reported today that Trump was looking to pull the trigger soon, while The New York Times claimed that the president had already drafted a letter to the effect.

Trump, however, immediately said he wasn’t planning on firing the Fed chairman, and even downplayed accusations of fraud about the $2.5 billion headquarters renovation.

Where does that leave us? Let’s keep our eyes on the prize: CME FedWatch indicates there’s only a 2.6% chance of rates coming down at the next Federal Open Market Committee (FOMC) meeting, scheduled for July 30. However, those odds jump to almost 60% for September.

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