If tariffs weren’t enough for markets to contend with, President Donald Trump has thrown another major worry into the market with the calling of the head of Federal Reserve Chairman, Jerome Powell.

Trump has been calling on Powell to lower interest rates and last week called for his termination following hawkish comments from the Fed Chairman.

“Powell’s termination cannot come fast enough!” Trump stated last Thursday after calling him “too late” to cut rates.

Trump upped the ante on Monday, calling on Powell to initiate “preemptive cuts” or risk a slowing economy.

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump stated.

Unfortunately, it is Trump’s tariff policy that has Powell & Co. tightly on hold.

In his speech last week in Chicago, Powell highlighted that “[t]ariffs are highly likely to generate at least a temporary rise in inflation.”  He also warned that their effects “could also be more persistent.”  The Fed Chairman promised to wait for “greater clarity before considering any adjustments to our policy stance.”

Market watchers view the standoff between Trump and Powell as a power struggle over the Fed’s independence, which has markets worried.

Powell’s term as Fed Chairman runs through May of 2026, so there are legal questions arising if Trump has the authority to remove him before that.

“The risk is now twofold. First, that Powell holds the line and policy stays restrictive longer than markets had priced,” Nigel Green, CEO of deVere Group stated. “Second, that Trump intervenes—publicly or politically—sparking concerns over central bank independence.”