Biden’s Relationship with Fed Chair Powell
Joe Biden maintained a professional and hands-off relationship with Federal Reserve Chair Jerome Powell, emphasizing the Fed’s independence. Biden reappointed Powell for a second term in November 2021, signaling confidence in his leadership during economic challenges like post-pandemic recovery and high inflation. Biden stated he never spoke directly with Powell, underscoring his commitment to the Fed’s autonomy: “The Federal Reserve is an independent operation… I’m not going to do the kinds of things that have been done in the last administration.” This approach aligned with Democratic calls for Fed independence, though some, like Senator Elizabeth Warren, criticized Powell’s policies and urged replacing him. Biden’s administration largely avoided public interference in monetary policy, focusing instead on fiscal measures to complement the Fed’s actions.
Trump’s Relationship with Fed Chair Powell
Donald Trump’s relationship with Powell was contentious and marked by frequent public criticism. Trump appointed Powell as Fed Chair in 2017 but soon clashed with him over interest rate policies, favoring lower rates to boost economic growth. Trump repeatedly attacked Powell, calling his decisions “wrong” and, in April 2025, stating, “Powell’s termination cannot come fast enough!” He even claimed he could fire Powell “real fast,” challenging the Fed’s independence. Trump’s rhetoric suggested a desire to exert influence over monetary policy, particularly to counter economic fallout from his tariff policies, which Powell warned could fuel inflation and slow growth. Despite threats, Trump’s advisors, like Treasury Secretary Scott Bessent, cautioned against firing Powell due to potential market instability.
Comparison
Biden’s approach was restrained, respecting the Fed’s independence and avoiding direct pressure on Powell, even when facing economic headwinds. Trump, conversely, openly challenged Powell’s authority, viewing the Fed’s actions as misaligned with his economic agenda. Biden’s reappointment of Powell reflected bipartisan trust, while Trump’s threats to fire him underscored a willingness to test legal and institutional boundaries. Trump’s actions raised concerns about politicizing the Fed, a stark contrast to Biden’s deference to its autonomy.
Who Can Fire the Fed Chair?
The Federal Reserve Act allows the president to remove a Fed governor, including the Chair, only “for cause,” typically interpreted as misconduct, inefficiency, or malfeasance, not policy disagreements. Powell has stated, “Not permitted under the law,” emphasizing that removal without cause is illegal. No Fed Chair has ever been fired, making any attempt legally untested. A 1935 Supreme Court precedent (Humphrey’s Executor v. United States) supports this restriction, though Trump’s administration is challenging similar protections for other agencies, potentially affecting the Fed if the Court overturns precedent. Congress could theoretically change the law, but Powell noted broad bipartisan support for Fed independence.
Is the Fed Under Reasonable Control of the U.S. President?
The Fed is designed to operate independently to insulate monetary policy from political pressure, a principle Powell has repeatedly affirmed: “Our independence is a matter of law… We’re never going to be influenced by any political pressure.” The president nominates the Fed Chair and governors, subject to Senate confirmation, but cannot dictate policy or remove them without cause. The Fed’s funding comes from its operations, not congressional budgets, further limiting presidential control. While presidents can influence the Fed through appointments and public statements, direct control is minimal, ensuring the Fed prioritizes long-term economic stability over short-term political goals. However, Trump’s challenges highlight ongoing tensions, and a Supreme Court ruling could potentially weaken these protections.
Critical Note
The Fed’s independence is crucial for maintaining market confidence and economic stability, but it’s not absolute—legal challenges or legislative changes could shift the balance. Trump’s actions suggest a willingness to push boundaries, while Biden’s restraint preserved the status quo. The ongoing Supreme Court case could set a precedent affecting the Fed’s autonomy, making this a pivotal moment for its relationship with the executive branch. Always question narratives that present the Fed as entirely untouchable or wholly subservient; the truth lies in the legal and political constraints that evolve with each administration.