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Legal and Regulatory

Trump wants to sack Fed chief. Here’s what the law says about removal of RBI governor

Trump wants to sack Fed chief. Here’s what the law says about removal of RBI governor
Trump wants to sack Fed chief. Here’s what the law says about removal of RBI governor
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US President Donald Trump (R) and Chairman of the Federal Reserve Jerome Powell

Synopsis

US President Donald Trump recently criticised Fed Chair Jerome Powell for not cutting interest rates. Whether Trump can terminate Powell is still being debated. But it is interesting to understand the law around the removal of the RBI governor.

When politics and banking regulators collide, the fallout often rattles the markets and shakes investor confidence. Last week, US President Donald Trump took direct aim at US Federal Reserve Chair Jerome Powell, criticising him for not reducing interest rates and threatening that “Powell’s termination cannot come fast enough!” Powell’s term, however, ends in May 2026. Since Trump’s comments, US stock markets have fallen. The dollar index (DXY)
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