Trump: If Powell doesn't leave when his term ends, he'll be fired; interest rates may go down after Walsh takes office.

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The position of Federal Reserve Chair remains unresolved, and tensions between the White House and the central bank are evolving into a potential legal and institutional confrontation.

On the 15th, Trump stated, if Powell remains in office after his term expires, he will be dismissed. Powell's term as chair will expire on May 15 (if he remains a board member, his term turns until January 2028), but since Trump's nominee for successor, Kevin Walsh, has not yet been confirmed by the Senate, Powell has previously made it clear he will continue to serve according to law until his successor takes office. Trump's words in an interview were blunt: "If he doesn't leave, then I'll have to fire him."

This statement has thrown the transition of power for the Federal Reserve Chair into uncertainty, further exacerbating market concerns about the Fed's independence. Meanwhile, Trump also stated he does not intend to drop the investigation into Powell and hopes Walsh will be confirmed by the Senate. According to "New Fed News Agency" reporter Nick Timiraos, a third legal dispute between the Trump administration and the Federal Reserve may erupt.

Power vacuum spawned by transition gap

There is a timing gap between Powell's term expiration and Walsh's Senate confirmation, which is the core of the current controversy. According to Federal Reserve regulations, if the successor cannot take office in time, the current chair may continue to serve as "acting chair," and Powell himself has cited this clause as the basis for remaining in office.

WallstreetCN previously reported that on April 21, Fed chair nominee Walsh will attend a confirmation hearing of the Senate Banking Committee. Walsh must be confirmed by the committee and the full Senate in order to succeed Powell, whose term ends May 15.

Trump's hard stance means that if there is a delay in Walsh's confirmation process, the confrontation may rapidly escalate from political to legal. Currently, Trump has openly expressed hope for Walsh's confirmation, but the Senate review process is not yet complete.

Rising risk of legal confrontation, Fed independence under sustained pressure

According to Nick Timiraos, the Trump administration has previously failed in two legal actions involving the Fed—neither summoning relevant personnel nor dismissing Fed board member Lisa Cook. Against this backdrop, outsiders are cautious about whether the White House can force Powell's departure.

Analysts believe that firing the Federal Reserve Chair faces major legal obstacles, and related lawsuits may become the main battleground in the next round of the White House-Fed competition. The Trump administration's previous judicial setbacks suggest any forced action could trigger a protracted legal tug-of-war.

Trump's public pressure on Powell has lasted for months, involving monetary policy direction, interest rate decisions, and investigations into Powell personally. This "threat of dismissal" is the most direct statement to date, marking a further public deepening of the rift between the White House and the Federal Reserve.

The independence of the Federal Reserve has always been regarded as an important cornerstone for maintaining the credibility of monetary policy and stabilizing financial market expectations. The evolution of the current situation will directly affect investors' assessment of the future direction of Fed policy and its institutional credibility.

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