Pressure Mounts on Jerome Powell: Calls for Resignation, Potential Impacts, and Succession Speculation

As of July 24, 2025, Federal Reserve Chairman Jerome Powell is facing strong political pressure from the Trump administration. Many economists and officials are calling for him to resign. Powell has not stepped down and says he will finish his term, which ends in May 2026. But talks about him leaving have grown louder due to criticism of his policies, claims of poor management, and worries about the Fed's independence. This article looks at why people want him to resign, what could happen to U.S. markets and the global economy if he does, and who might take his place.

Reasons Behind the Calls for Powell's Resignation

People are pushing for Powell to resign because of political fights, mistakes in his policies, and efforts to protect the Federal Reserve's freedom:

1. Attacks from the Trump Administration: President Donald Trump has often blamed Powell for keeping interest rates too high. He says Powell is biased and not helping the economy grow. Trump has sent letters demanding lower rates and pointed to the Fed's big spending on its headquarters as a sign of waste.
2. Criticism of His Policies and Past Errors: Powell has been criticized by both parties for how he handled inflation after the pandemic. He called it "temporary" at first, which delayed raising rates and made prices rise more. A banking crisis in 2023 and scandals about insider trading at the Fed have hurt trust in him. Some experts say he would have been fired if he ran a company. Others point out the Fed is doing too much beyond its main jobs, like getting involved in climate issues.
3. Protecting the Fed's Independence: Some people think Powell should quit to keep the Fed safe from politics. As his term nears the end, he is seen as less powerful, and attacks could harm the whole organization. Stepping down could let a new leader focus on key tasks without interference.
4. Fake News and Rumors: Fake letters saying Powell resigned spread online recently, fooling some people and adding to the confusion.

Powell has said he won't quit easily and points to laws that protect the Fed from outside control.

Impacts on U.S. Markets and the Global Economy

If Powell resigns, it could cause big changes in finance, but opinions vary on how bad it would be:

• Short-Term Market Ups and Downs: Bond prices might change quickly as people worry about what's next. Stocks could drop at first, like they did before when Trump threatened to fire him. This could make borrowing more expensive and signal a possible recession.
• Wider Economic Effects: If people think the Fed is controlled by politics, they might lose faith in U.S. money policies. This could weaken the dollar and raise costs worldwide. Countries that depend on U.S. dollars might see money leave. But a new leader who cuts rates could help stocks and things like Bitcoin rise as people look for safe options.
• Effects Around the World: Other countries' banks might make different choices, making trade harder. It could push people away from using the dollar as the main global money and toward new options like digital currencies.

Past events show markets might drop at first but calm down if a good replacement is picked fast.

Nominations and Likely Successors

Trump has said he is thinking about three or four people to replace Powell, with news possibly coming in the fall of 2025. Top choices include:

• Scott Bessent: The current Treasury Secretary and a Trump supporter. He knows markets well and wants lower rates. He says there's no rush for Powell to quit but supports changes.
• Kevin Warsh: A former Fed leader known for strict views on inflation. He has been considered before and might appeal to those wanting tougher rules.
• Christopher Waller: A current Fed member who focuses on facts and recent rate changes.
• Kevin Hassett: A top economic advisor to Trump, whose ideas match the president's goals.

The Senate would need to approve the new person, which could lead to fights between parties. Betting sites favor Bessent, but it depends on politics.

Conclusion

Jerome Powell has not resigned, but the pressure shows big disagreements over U.S. money rules and keeping the Fed independent. Quitting could reduce long-term harm but cause short problems; staying might lead to more attacks. Markets are watching closely, and the Fed's future will affect economies for years. Investors should pay attention to official news in this ongoing story.

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