Jerome Powell May Resign Under Trump Pressure: Report

• Trump allies say Powell should resign as reports suggest he may leave before his term ends.
• Prediction markets show most traders do not see any interest rate cuts happening this month.
• Schiff warns that slashing rates to 1.25% could destroy the dollar and fuel inflation.

Federal Reserve Chair Jerome Powell is reportedly considering resigning, following heightened political pressure and internal criticism from the Trump administration, according to a statement from FHFA Director Bill Pulte. Pulte released a public message via X and the FHFA website, stating he was “encouraged” by unspecified reports of Powell’s potential resignation. “I think this will be the right decision for America, and the economy will boom,” he wrote. 

The message comes after months of public and internal government backlash over Powell’s monetary policies and a controversial $2.5 billion renovation of the Fed’s headquarters.

President Donald Trump, who has consistently criticized Powell, continues to demand aggressive rate cuts. Though he told reporters Friday that he did not intend to fire the Fed Chair, his comments and past attacks—including calling Powell “low IQ” and claiming “he hates me”—have fueled widespread concern over Powell’s future.

Administration Pressure Escalates Over Fed Mismanagement Claims

In addition to Pulte’s statement, White House Budget Director Russell Vought intensified the pressure with a letter on X, accusing Powell of “gross mismanagement” of the Federal Reserve. He pointed to the expensive D.C. headquarters renovation as evidence and said Powell had “misled Congress” about the scale of the project.

Vought’s letter read, “Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul.” Powell defended the project in June during Senate Banking Committee testimony, calling the reported figures and descriptions “misleading and inaccurate.”

This public offensive has raised questions about whether the Trump administration is trying to lay the groundwork to remove Powell “for cause,” which legal analysts note is the only permissible route under current law. Powell’s term runs through May 2026, making his early exit unlikely without legal justification.

NBC News reported that removing Powell could trigger severe financial consequences. ING analysts said such a move would likely cause U.S. debt yields to surge and trigger a market selloff. They added that the U.S. dollar would face sharp downward pressure, and the effects would likely persist.

Polymarket Bets Signal Caution Amid Political Drama

Despite the political storm, prediction markets are signaling restrained expectations for immediate monetary policy changes. Polymarket’s “Fed Decision in July?” contract shows a 94% chance of no rate change, with only 5.3% betting on a 25 basis point cut. The odds for a 50+ basis point cut are at just 1.4%, and fewer than 1% foresee a rate hike.

The market, which has recorded over $38 million in trading volume, suggests that despite the noise, traders expect the Fed to hold steady in the July 30 meeting. This data indicates strong skepticism that Trump’s pressure will translate into immediate Fed action.

Related: Trump’s Rate Cut Battle with Powell: Will His Fed Chair Pick Shift Policies?

Schiff Warns of Dollar Collapse if Fed Chair Steps Down

Financial analyst Peter Schiff claimed that U.S. Fed Funds rates, currently at 4.25%–4.5%, may drop drastically if Jerome Powell resigns. Schiff turned his attention to rumors suggesting Powell could step down by Monday, potentially allowing a replacement to cut rates to 1.25%–1.5%, which is a level supported by President Donald Trump. Schiff warned this could collapse the dollar, raise consumer prices, spike gold, and trigger soaring long-term interest rates.

Amid these developments, the global crypto market is closely watching for potential ripple effects and preparing for what may come next. Will Jerome Powell’s resignation affect the market negatively? And if it will, the real question is how bad or in what depths is it going to dig?

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