Jerome Powell, the Federal Reserve Chair, has made it clear that he'll sue President Trump if he attempts to fire him, citing that the Federal Reserve's chair can't be removed solely due to disagreements over interest rate policy ¹. This stance stems from a clash in 2018 when Trump wanted the Fed to lower interest rates, while Powell kept them high to control inflation. Powell considers Trump's potential actions as "setting a dangerous precedent."
The Federal Reserve Act protects Board Governors, including Powell, from removal without "cause," such as inefficiency, neglect of duty, or malfeasance ¹. Powell's lawsuit would focus on clarifying his status, and he's prepared to cover legal costs himself.
Powell's determination stems from preventing the Fed Chair from becoming a political appointee, subject to removal at the President's whim. Scott Alvarez, former Fed general counsel, supports Powell's stance, emphasizing the importance of maintaining the Fed's independence ¹.
