Trump shares AI image of himself firing Fed Chair Powell

President Donald Trump on Saturday posted on Truth Social a cartoon-style image that appeared to show him firing Federal Reserve Chairman Jerome Powell.

The picture showed Trump pointing his finger and shouting “YOU’RE FIRED!” while Powell stood holding a cardboard box filled with his belongings.

The backdrop included the seal of the Federal Reserve. ChatGPT’s visual analysis described the picture as “AI-generated or digitally illustrated.”

The post followed months of Trump attacking Powell’s record. He has repeatedly called the Fed chair “Too Late Powell” and blamed him for holding back the economy by refusing to slash interest rates quickly.

Earlier in September, the central bank cut interest rates for the first time this year, but Trump still argued it was not enough. Powell’s current term is set to run until May 2026.

Trump challenges Fed leadership despite legal rulings

The idea of removing a Fed chair is unprecedented. No president has ever tried to dismiss the head of the central bank. A recent Supreme Court decision ruled that the president does not have the authority to remove Federal Reserve officials at will.

Powell himself has said many times that his firing is “not permitted under the law.” The Trump White House has also criticized Powell for the ongoing renovations of the Fed’s Washington headquarters, fueling speculation that Trump might seek to remove Powell for cause.

In recent weeks, Trump has softened his remarks about the building but has continued to argue that Powell is keeping borrowing costs too high.

This push comes after Trump moved against other officials. In August, he attempted to fire Fed Governor Lisa Cook, accusing her of mortgage fraud. That case is now under review at the Supreme Court.

On Friday, the Department of Justice filed a brief at the Court saying that removing Lisa for alleged misconduct would not destabilize financial markets. Lisa’s attorneys countered in their filing that her removal could threaten the independence of the Federal Reserve.

So far, financial markets have not reacted strongly to these attempts. Economists and investors, however, warn that if Powell were removed before his term ends, long-term interest rates could rise.

They argue that markets might assume the central bank was acting in Trump’s political interest instead of following its congressional mandate of ensuring stable inflation and low unemployment.

Trump policies weigh on dollar and Fed projections

Uncertainty around Trump’s economic policies dominated a conference held last week at the Federal Reserve Bank of New York. The combination of his tariff agenda and moves to reshape the Fed’s board brought more attention to the stability of the U.S. dollar as the world’s main reserve currency.

The New York Fed plays a central role in implementing monetary policy set in Washington. It serves over 200 account holders, including foreign central banks. It also operates as custodian of gold reserves for the U.S. government and foreign clients.

Deep under the Fed’s Manhattan headquarters, about 25 meters below street level, sits a vault holding roughly 507,000 gold bars, with a combined weight of 6,331 tonnes as of 2024.

The dollar remains critical to global investment decisions. But a string of Trump’s moves this year have weakened the greenback. The ICE dollar index, which measures the currency against six major peers, has dropped more than 9 percent.

Analysts point to the president’s tariff measures and his attempts to influence the Fed’s leadership. These actions include placing Stephen Miran, a close economic ally, on the Fed board and attempting to remove another governor over fraud claims.

Even with these steps, the Fed has not met Trump’s demand for aggressive rate cuts. The Fed’s most recent projections showed another 50 basis points in cuts expected by the end of 2025, following a 25 basis point reduction earlier this month.

That would place the effective federal funds rate at about 3.6 percent. Trump has been pushing for a 3 percent reduction. Among Fed leaders, only Stephen Miran has backed the call for such deep cuts.

Meanwhile, a top executive at PGIM Fixed Income warned that pressure from President Donald Trump could push the Federal Reserve into cutting rates too aggressively, posing a short-term risk to the U.S. dollar. The currency has already slipped about 9.5% this year against a group of major peers.

Daleep Singh, vice chair and chief global economist at the New Jersey firm that manages close to $900 billion, said at a Federal Reserve Bank of New York conference, “We do worry quite a bit about an abruptly dovish shift in the Fed’s reaction function going into next year.” He added, “There’s a very decent chance that the FOMC looks and acts quite differently.”

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