US President Donald Trump has escalated his pressure campaign against Federal Reserve Chair Jerome Powell, threatening to dismiss him if he does not vacate his post when his term as chair expires in mid-May. "I'll have to fire him," Trump told Fox Business on Wednesday, adding bluntly: "I've wanted to fire him." The remarks mark a fresh escalation in an unusually public confrontation between a sitting president and the head of an institution that has long been regarded as a cornerstone of American economic independence.

Powell has indicated he intends to stay on if his designated successor, former central banker Kevin Warsh, has not yet been confirmed by the US Senate — a scenario that remains plausible. Warsh's confirmation hearing before the Senate Banking Committee is scheduled for next Tuesday, but the process faces significant hurdles. Senator Thom Tillis, a Republican member of the committee, has vowed to block the nomination as long as a Department of Justice investigation into Powell over alleged renovation cost overruns at the Fed remains unresolved. Powell has called the probe a "pretext" designed to pressure him into cutting interest rates. His term on the Fed's board of governors — a separate role from chair — does not expire until January 2028, though governors customarily step down when their chairmanship ends.

At the heart of the dispute is Trump's insistence that the Fed slash interest rates, partly to reduce the government's cost of servicing its roughly $39 trillion national debt. The Fed last cut rates in December, to a range of 3.5%–3.75%, but policymakers have grown cautious about further reductions amid concerns over inflation. Former Fed chair and Treasury Secretary Janet Yellen, speaking at an investor summit in Hong Kong, drew a sharp comparison: "How often does the president of a developed country express the view that the interest rate should be set to reduce the debt service cost? This is what you hear in a banana republic." Yellen, who led the Fed from 2014 to 2018 and was succeeded by Powell, also questioned whether Warsh, who has argued that potential productivity gains from artificial intelligence could justify lower rates, carries sufficient credibility to persuade fellow board members.

The standoff carries implications well beyond domestic politics. Finance ministers and central bank governors are gathered in Washington this week for the International Monetary Fund's spring meetings, where central bank independence has emerged as a prominent theme. Bank of England Governor Andrew Bailey, speaking in New York ahead of the meetings, underscored the importance of that independence. The broader global backdrop — including rising oil prices linked to conflict in the Middle East and IMF warnings about a potential global recession — makes the stability of US monetary policy a matter of international concern. Analysts warn that any perception of political interference at the Fed could unsettle financial markets already navigating considerable uncertainty.