The escalating feud between the White House and the Federal Reserve reached a boiling point on April 15, 2026, when President Trump issued his most severe warning yet to Fed Chair Jerome Powell. In an interview with Fox Business, Trump stated outright that if Powell refuses to step down, he will be fired, and vowed not to drop the Department of Justice criminal investigation against him.
Trump: If he won't leave, I'll have to fire him
Powell's term as Fed Chair ends on May 15, 2026, but his term as a Fed governor runs until 2028. Despite Powell repeatedly stating he has no intention of leaving early and accusing the White House of undermining Fed independence, Trump showed no restraint. When the host mentioned Powell's refusal to resign, Trump responded bluntly: "Then I'll just have to fire him."
Trump has nominated Kevin Warsh to succeed Powell as Fed Chair, but confirmation faces resistance in the Senate. When asked whether Senator Thom Tillis, who opposes the appointment unless the investigation into Powell is dropped, would vote yes, Trump coldly remarked: "He might not, but that's why he won't be a senator anymore."
No withdrawal of DOJ criminal probe, slams Powell as 'highly incompetent'
Beyond threats of dismissal, Trump escalated pressure by declaring he will not drop the DOJ criminal investigation into Powell. The probe focuses on whether Powell's congressional testimony about billions of dollars in renovations to the Fed building was truthful and whether serious misconduct occurred. Trump, who had previously shown restraint due to market concerns, now openly called Powell's actions either "corrupt" or "highly incompetent."
WSJ reporter warns: Third courtroom battle looms
The explosive interview immediately rattled Wall Street and Washington. Nick Timiraos, the Wall Street Journal's chief economic correspondent, known as the Fed's mouthpiece, commented on X: "There could be a third courtroom battle between Trump and the Fed. The administration has so far failed in its subpoena or efforts to fire Lisa Cook."
Timiraos highlighted the complex legal stalemate: the White House had previously attempted to subpoena Powell and forcibly remove Fed Governor Lisa Cook, but both efforts were legally blocked. U.S. law allows a president to remove a Fed official only "for cause", and pure policy disagreements do not qualify. No U.S. president has ever successfully removed a Fed chair. If Trump proceeds with the firing, it would almost certainly trigger a Supreme Court showdown over constitutional separation of powers, marking the third legal battleground.
The confrontation between the White House and the central bank is entering uncharted territory. Markets are closely watching whether Powell will depart early and how the judiciary will rule on presidential interference in central bank independence.