When Jerome Powell’s term as Federal Reserve Chair expires on May 15, 2026, Donald Trump made his most explicit announcement to date on April 15, 2026. “Then I’ll have to fire him,” Trump stated in an interview with Fox Business. I’ve refrained from dismissing him if he doesn’t leave on time.” Powell, for his part, has stated that he plans to stay on the Fed’s Board of Governors even when the chair title expires, so long as the Senate has not yet approved his nominee. He is legally allowed to do just that. The Supreme Court is currently addressing the question of whether the president has the power to remove him from the board in a separate case, and if history is any indicator, the outcome is probably not what Trump is hoping for.
It’s worth paying attention to the architecture of what Trump is proposing here. He is not merely pressuring the chair of the Fed to cut rates—a dispute as old as the Fed itself. He’s running several pressure tracks at once. There is the public campaign, which calls Powell a “disaster,” “incompetent,” and frequently posts on Truth Social that his “termination cannot come fast enough.” In the institutional campaign, Powell has openly and explicitly referred to the Department of Justice’s criminal investigation of the Fed’s $2.5 billion headquarters refurbishment as a “pretext” for the underlying rate objective. In that case, a federal court invalidated the DOJ’s subpoenas; the DOJ has stated that it will file an appeal. Additionally, there is the campaign to replace Powell. In January 2026, Trump selected former Fed governor Kevin Warsh to succeed Powell. The choice is illuminating. Part of the reason Warsh quit the Fed in 2011 was that he preferred higher rates than lower ones. Trump seems to think that Warsh’s views have changed or that the appointment itself indicates sufficient compliance to lower mortgage rates.
Important Information
| Field | Details |
|---|---|
| Jerome Powell | Chair of the Federal Reserve since 2018 — first nominated by Trump in 2017, reappointed by President Biden in 2022; term as chair expires May 15, 2026; has stated he will remain on the Fed Board as a governor even after his chair term ends if his replacement has not been confirmed |
| Trump’s April 15, 2026 Threat | Trump stated on April 15, 2026, that he will fire Powell if Powell stays on in any Fed role after May 15; Trump said on Fox Business: “Then I’ll have to fire him. If he’s not leaving on time — I’ve held back firing him” |
| Kevin Warsh | Former Fed governor (2006-2011) — Trump nominated Warsh in January 2026 to succeed Powell; viewed by Trump as likely to cut rates; Warsh previously advised Trump not to fire Powell before his term expired; critics note Warsh historically favored higher rates during his earlier Fed tenure |
| DOJ Investigation | The Department of Justice opened a criminal investigation into Powell over his handling of the Fed’s $2.5 billion headquarters renovation project; Powell has called the investigation and other actions “pretexts” for Trump’s goal of forcing lower rates; a federal judge quashed DOJ subpoenas in the case |
| Governor Lisa Cook Firing | Trump fired Fed Governor Lisa Cook in August 2025 over unsubstantiated mortgage fraud allegations; a court blocked the firing; the case is now before the Supreme Court, which is expected to rule by late June 2026 on whether the president has authority to remove Fed board members |
| $200 Billion Mortgage Bond Move (January 2026) | Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities; the announcement caused a 22-basis-point drop in 30-year fixed mortgage rates on January 9, 2026 — briefly pushing the rate to 5.99%, the lowest since 2022; short-lived: rates climbed back as inflation concerns returned |
| Current Mortgage Rate Environment | After the brief dip below 6%, rates have returned to a “holding pattern” above 6% — influenced by inflation fears following the closure of the Strait of Hormuz due to US-Israeli military action against Iran in late February 2026 |
| Fed Rate Decision Context | Fed held rates steady through early 2026 while monitoring tariff-driven inflation; delivered three rate cuts at the end of 2025 then paused; the ongoing Middle East conflict has added an inflationary layer that is complicating any near-term rate cut calculus |
The administration’s push has manifested itself most practically in the housing component of this. Trump said on Truth Social at the beginning of January 2026 that he was ordering his “Representatives” to buy $200 billion in mortgage-backed securities. Fannie Mae and Freddie Mac are the two government-sponsored mortgage companies that are presently under federal conservatorship. The reasoning was clear: the government could tighten spreads and lower the 30-year fixed mortgage rate without consulting the Fed at all by boosting demand for mortgage bonds.
For a moment, it worked. The following day, the statement caused a 22-basis-point decline, momentarily lowering the 30-year rate to 5.99 percent, the lowest level since 2022. Overnight, refinance applications increased 133% year over year. After the blockage of the Strait of Hormuz due to US-Israeli military action against Iran in late February, the effect had mostly subsided within weeks, with rates rising back above 6 percent as energy costs surged. That river carries almost 20% of the world’s oil supplies. Expectations for inflation increased. The Fed held.
After May 15, Trump’s actual position will depend on the Supreme Court’s decision regarding the outstanding underlying legal question. The issue concerns Trump’s dismissal of Fed Governor Lisa Cook in August 2025 due to accusations of mortgage fraud, which Cook refuted and for which there have been no criminal charges. The firing was stopped by a court. The Supreme Court has heard arguments in the case and is anticipated to rule by late June 2026.
The result is significant because it will either strengthen or weaken the president’s authority to remove independent agency officials for any reason. Recognizing the Fed’s distinct quasi-private structure, a previous Supreme Court decision in May 2025 explicitly separated the Fed from a more general decision that permitted the presidential replacement of other independent agency chiefs. The unanswered question is whether that carve-out applies to the Cook case and, hence, to any Powell removal attempt.
The irony that permeates this narrative is difficult to ignore. The market uncertainty that keeps long-term rates high has been exacerbated by Trump’s strongest pressure on the Fed, including the threats, the DOJ investigation, and the Truth Social posts. Higher yields are demanded by investors who are pricing in political risk at the central bank. Mortgage rates are directly impacted by those higher yields. Using Fannie and Freddie as a direct lever and completely avoiding the Fed has been the administration’s most successful approach to mortgage rates. That effect was real, but it was small and quickly diminished. The true test will be if Warsh, once confirmed, genuinely lowers interest rates in ways that make borrowing less expensive, or if Powell’s inflationary climate makes that impossible regardless of who is in charge.
