Trump moves to oust Federal Reserve Chair Jerome Powell in unprecedented move

President Donald Trump has sought to terminate Federal Reserve Chair Jerome Powell, potentially setting up another constitutional fight if Powell refuses to go.

Jerome Powell appeared Friday to open the door to the central bank’s first rate cut of President Donald Trump’s second term as the Federal Reserve chair indicated that current monetary policy may be restricting economic activity. 

In a closely watched speech at the Fed's annual symposium in Jackson Hole, Wyoming, Powell said the labor market was now in a “curious kind of balance” resulting from lowering hiring and decreasing availability of workers amid Trump’s immigration crackdown and demographic changes. 

But overall, “downside risks to employment are rising,” Powell said. “And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.” 

As a result, a change in the Fed’s current policy stance — in the form of lowering its benchmark interest rate — may be warranted, he said. By making it less expensive for consumers and businesses to take out loans, the Fed seeks to boost overall economic activity. 

Stocks surged on the remarks as investors anticipated the Fed was now more likely to lower its key borrowing rate at its next meeting in September.