Lately, Donald Trump has floated the idea of firing Federal Reserve Chair Jerome Powell. As with many of his public statements, it’s unclear whether this is a serious policy move or simply jawboning to pressure Powell into cutting rates ahead of the election.

That said, it’s worth watching. The Fed is unlikely to cut rates at the July meeting, with the next opportunity coming in September.

So, what happens if Trump actually fires Powell?

While no Fed chair has ever been fired mid-term, the law around this is murky. But one thing is clear: whoever Trump appoints next would likely be expected to cut rates aggressively. Trump has publicly said he believes rates should be 3% lower, which would be a massive shift—and a potential shock to financial markets.

Would a new Fed chair agree to that? Would that be a condition of the job? These are open questions, but the implications are significant.

Even if Powell isn’t removed, his term ends in May 2026, meaning the next Fed chair could be confirmed relatively early in a Trump administration. That person would inherit a tricky landscape:

• Stock markets at all-time highs
• Bitcoin and other speculative assets near peak levels
• A possible resurgence of inflation if rates are cut too aggressively

Rate cuts are traditionally used to stimulate growth. But in this environment, with markets already frothy, aggressive easing could fuel inflation or lead to instability in other areas—ironically pushing mortgage rates higher, not lower. I don’t think Trump will fire Powell in the short term, especially with a new round of tariffs already scheduled to hit markets on August 1st. But this remains a major wild card. The range of outcomes is wide, lets hope cooler heads prevail.

📌 Quick Recap

• Trump has publicly floated firing Jerome Powell
• No rate cut is expected in July; next opportunity is September
• Powell’s term ends in May 2026
• Aggressive rate cuts could ironically push mortgage rates up, not down if not done correctly