Jerome Powell Agrees to Resign as Fed Chairman After Continuous Pressure

On Friday night, the American financial community was shocked when Billy Pulte – the current Director of the Federal Housing Finance Agency (FHFA) – unexpectedly announced that Jerome Powell would resign as Chairman of the Federal Reserve of America (Fed). This decision came after months of enduring relentless political pressure from President Donald Trump and his close advisors. Information quickly spreads through financial channels, but the bond market seems to remain skeptical. Bond yields continue to rise, peaking during the day – a sign that investors do not yet believe Powell will actually leave his position of power. The Subtle Showdown Between Trump and Powell The conflict between President Trump and Chairman Powell is not a new issue. Over the past year, Trump has continuously attacked the Fed's monetary policy, arguing that Powell is "suppressing" the American economy. The climax occurred on June 9, when the President unexpectedly called for the Fed to cut interest rates by up to 300 basis points (equivalent to 3%), a demand that experts have assessed as "economically irrational". The president declared that reducing interest rates by 3% would help America save "360 billion USD per point per year" – a total of over 1.080 trillion USD annually. However, this figure is calculated based on the total federal debt of 36 trillion USD, which includes internal debts. In reality, only about 29 trillion USD is the actual public debt that affects borrowing costs. Experts quickly pointed out the mistake in Trump's calculations. Moreover, even if Powell agrees to lower interest rates that much, refinancing the entire national debt immediately is impossible. According to analyses, only about 20% of the debt can be refinanced in the first year, equivalent to a savings of 174 billion USD. If this process takes 5 years, the total maximum savings would only be around 2.5 trillion USD – still far less than what Trump claimed. Political Pressure and Public Defamation It is not possible to directly remove Powell due to legal constraints – The U.S. Supreme Court has previously ruled that the Fed Chair cannot be dismissed without "just cause" – President Trump and his team are shifting towards a strategy of personal pressure and media attacks. A series of aggressive statements were made from the White House. On Friday morning, standing on the south lawn before heading to Texas, Trump continued to criticize Powell: "I think he is doing a very bad job. We should lower interest rates by at least 3 points. He is costing America billions." Maggie Haberman, a reporter for the New York Times, stated on CNN that Trump is unlikely to fire Powell, but is clearly "making his life as miserable as possible." She also emphasized the irony that Powell was appointed by Trump himself and is a Republican. The Fed Building Worth 2.5 Billion USD Becomes a "Totem" In addition to the interest rate issue, the White House is also targeting the renovation project of the Fed's headquarters – the Marriner S. Eccles Building in Washington D.C., with a total investment of up to 2.5 billion USD. This project has been approved by the National Capital Planning Commission (NCPC) since 2021. Trump's budget director – Russell Vought – on Thursday sent a letter questioning Powell about the legality of the items in the project. The next day, he sharply criticized the work, calling it "a cost nightmare" and comparing it to the Palace of Versailles, saying that "it might be the eighth wonder of the ancient world." Powell then dismissed these allegations during the Senate hearing. He asserted that the rumors were misleading: "There is no VIP dining room, no new marble, no waterfall, no rooftop garden." According to him, the installation of marble was merely a replacement of damaged panels. The Reluctant Withdrawal Despite all efforts to protect his image and explain to the public, Powell could not stop the wave of relentless attacks. When the possibility of legal impeachment was no longer available, President Trump and his associates used political pressure and smear tactics to "push" him out of his position. Although there has been no official confirmation from the Fed at the time of the announcement, the fact that Billy Pulte – a significant figure in housing financial policy – is the one reporting has shown the seriousness of the announcement. Some internal sources reveal that the Trump administration is quietly putting together a list of alternative candidates, although there is no clear decision yet. Conclusion: The Political War on the Fed Has Begun Jerome Powell's withdrawal, if confirmed, marks a serious turning point in the relationship between the Federal Reserve and the White House. This is not just a conflict over economic policy but a clear manifestation of political interference in an organization that was designed to be independent. With Trump having appointed Powell and now leading the attack campaign against him, this story could set a dangerous precedent, undermining market confidence in the independence of American monetary policy.