There may be some big changes on the horizon. But Trump’s holding his cards close to his chest.
Now President Trump denied a leaked report of a secret conversation.
Trump Challenges Report on Treasury Secretary’s Role in Fed Chair Debate
President Donald Trump has vehemently rejected a Wall Street Journal report claiming that Treasury Secretary Scott Bessent privately cautioned him against firing Federal Reserve Chairman Jerome Powell, labeling the story “untruthful.”
The report, published on Saturday, July 19, alleged that Bessent outlined significant risks during discussions with Trump the previous week, including potential economic and market disruptions, legal challenges, and the possibility that the Fed might lower interest rates later in 2025 regardless of Powell’s status.
In a fiery Truth Social post on Sunday, July 20, Trump dismissed the suggestion that Bessent needed to “explain” the market implications of such a move, asserting his own expertise:
“The Wall Street Journal ran a typically untruthful story today by saying that Secretary of the Treasury, Scott Bessent, explained to me that firing Jerome ‘Too Late’ Powell, the Worst Federal Reserve Chairman in History, would be bad for the Market. Nobody had to explain that to me. I know better than anybody what’s good for the Market, and what’s good for the U.S.A. If it weren’t for me, the Market wouldn’t be at Record Highs right now, it probably would have CRASHED! So, get your information CORRECT. People don’t explain to me, I explain to them!”
Ambiguity Surrounds Trump’s Intentions on Powell’s Tenure
Trump’s public statements on Powell’s future have been inconsistent, reflecting both his frustration with the Fed’s policies and a cautious approach to acting on his criticisms.
Despite repeatedly attacking Powell for maintaining high interest rates—calling him “the Worst Federal Reserve Chairman in History” and “doing a lousy job”—Trump has oscillated on the question of dismissal.
On July 16, he told reporters it was “highly unlikely” he would fire Powell, stating, “I don’t rule out anything, but I think it’s highly unlikely unless he has to leave for fraud.”
Yet, reports surfaced the same day that Trump had discussed firing Powell with House Republicans, even brandishing a draft letter of termination during a meeting on an unrelated topic, suggesting he was seriously considering the move.
This followed earlier remarks in April 2025, when Trump said he had “no intention” of ousting Powell, only to later hint at replacing him within eight months with “somebody that’s good.”
The mixed signals have fueled market uncertainty, with a Bloomberg report on July 16 briefly triggering a drop in stocks and the dollar before Trump’s denial prompted a recovery.
Legal experts note that firing Powell would be unprecedented and likely unconstitutional, as Supreme Court precedent suggests the Fed chair can only be removed “for cause,” such as misconduct, not policy disagreements.
White House Probes Fed Renovation Costs as Potential Grounds for Removal
The Trump administration has escalated its campaign against Powell by focusing on alleged mismanagement of a $2.5 billion renovation project for two Federal Reserve buildings in Washington, D.C., which could serve as a pretext for his removal.
Office of Management and Budget Director Russell Vought, in a letter dated July 10, accused Powell of “grossly mismanaging” the project and misleading Congress about its costs, which ballooned from an initial $1.9 billion due to unforeseen issues like asbestos removal and soil contamination.
Vought’s letter, posted publicly, claimed the project violated the National Capital Planning Act, a charge echoed by Trump loyalists appointed to the National Capital Planning Commission.
Trump himself called the overruns “disgraceful,” telling reporters on July 18, “I think it sort of is” sufficient grounds for firing Powell.
The White House’s actions, including replacing three commission members with allies like White House Secretary Will Scharf, suggest a coordinated effort to build a “for cause” case against Powell. However, former Fed general counsel Scott Alvarez and other experts argue that cost overruns, common in such projects, do not meet the legal threshold for malfeasance or DOL required for removal.
Powell has defended the project, citing “unforeseen conditions” and ordering an independent review by the Fed’s inspector general.
