Jerome Powell has agreed to step down as chair of the Federal Reserve following relentless attacks from President Trump and his inner circle, according to a statement released by Billy Pulte, the current head of the U.S. Federal Housing Finance Agency.
The announcement hit financial news wires Friday evening, but traders aren’t convinced. Yields kept climbing, pushing to the day’s highs, showing that the market doesn’t believe Powell is truly finished… yet.
Tensions had been building for at least a year now with these two. But on June 9, President Donald Trump demanded an immediate 300 basis point interest rate cut, which is economically senseless.
Trump told reporters that such a cut would save the U.S. “$360 billion per point per year,” adding up to over $1.08 trillion annually. His math was based on a $36 trillion debt figure, but that included all federal debt, not just the $29 trillion held by the public, which is the only part that matters when calculating savings on interest payments.
Trump pressures Powell using debt math and public shame
Even if Powell had approved such a dramatic cut , refinancing the entire debt stockpile at once is flat-out impossible. Experts say only around 20% of that $29 trillion could be refinanced within a year, translating to $174 billion in realistic first-year savings.
If 20% were refinanced each year under the 300-point rate reduction, interest savings over five years could hit $2.5 trillion. But none of that seemed to matter to Trump, who appeared more focused on undermining Powell than talking logistics.
Standing on the White House lawn Friday morning before flying to Texas, Trump tore into the Fed chief: “I think he’s doing a terrible job,” he said. “I think we should be 3 points lower, interest rates. He’s costing our country a lot of money.” Trump added that America should be leading the global economy, but wasn’t, because of Powell.
During a Thursday night segment on CNN’s “The Source”, Maggie Haberman of the New York Times said she doubted Trump would fire Powell outright, but made clear that “he’s going to make his life as miserable as possible.” Haberman pointed out the irony that Powell was Trump’s own appointment. “This was not somebody who was imposed upon him,” she said. “This was an appointee of his, previously. He is a registered Republican.”
Legally, Trump can’t just sack the Fed chair on a whim. In May, the Supreme Court ruled that Powell, or any Fed Chair, cannot be removed without cause. So instead of legal action, Trump’s team switched to personal pressure and very public attacks, especially targeting a $2.5 billion renovation of the Fed’s main building in D.C.
White House hammers Powell over $2.5B renovation at Eccles Building
That building, the Marriner S. Eccles Building, which has stood since 1937, is currently undergoing renovations approved by the National Capital Planning Commission back in 2021. Trump’s budget chief, Russell Vought, sent Powell a letter Thursday raising legal concerns about changes being made to the remodel.
Then on Friday, he ripped the project in front of reporters, calling it “horrifying from a cost perspective.” Vought went even further, comparing the renovation to the Palace of Versailles, saying: “It probably would qualify as one of the eight wonders of the ancient world if you were able to go back that far.”
Powell, appearing before the Senate in June, said a lot of the reports were false or exaggerated. “There’s no VIP dining room; there’s no new marble. We took down the old marble, and we’re putting it back up,” he testified. He added that any new marble was only replacing damaged slabs. Powell made it clear: “There are no new water features; there’s no beehives, and there’s no roof terrace gardens.”
Despite his explanations, the attacks kept coming. And with the Supreme Court blocking any easy removal, pressure mounted elsewhere. Trump’s allies float replacement names behind the scenes, even while insisting no firing was imminent. But the public smear campaign clearly has its effect. Powell has become the center of a political war between the White House and the Fed… one he didn’t seem willing to keep fighting.
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