Details of Secret Meetings Between US President Trump and Treasury Secretary Bessent Revealed: Will They Fire Powell?

US Treasury Secretary Scott Bessent reportedly explained in detail to President Donald Trump in private conversations that he should not dismiss Fed Chair Jerome Powell.

According to sources familiar with the matter, Bessent clearly explained to Trump the risks such a step could pose to the economy, markets and politics as Powell enters the final 10 months of his term.

Bessent’s key points to Trump’s warnings included signals that the Fed was preparing to cut interest rates by the end of the year, the potential negative market reactions, and the political and legal challenges of impeachment. According to the sources, Bessent argued that such a move was unnecessary, noting that the economy was already in good shape and that markets were responding positively to Trump’s policies.

While the possibility of Powell’s dismissal has been discussed for months, the issue resurfaced last week. Trump has frequently complained that the Fed needs to lower interest rates, and a senior White House official reported that the president, in a meeting with Republican lawmakers, said he was considering firing Powell. However, Trump told reporters the same day that he had no such plans.

The discussions briefly rattled financial markets, with investors concerned that the politically motivated removal of central bank governors could undermine the Fed’s independence and ability to control inflation.

In April, the Wall Street Journal reported that Bessent, along with Commerce Secretary Howard Lutnick, had advised Trump against firing Powell. In recent developments, Bessent has reminded Trump that if Powell is removed, he could file a lawsuit, and that the case could be delayed until May, when Powell’s term ends.

Some advisers also indicate that if Powell is removed, Fed Vice Chair Philip Jefferson would serve as acting chairman, though he too is a Biden appointee and close to Powell. They also point out the difficulty of quickly confirming a new presidential nominee due to the Senate’s summer recess.

Bessent’s other message to Trump was this: The president will have the option to make two key appointments at the beginning of 2025 that will determine the direction of the Fed. Fed Board Member Adriana Kugler’s term ends in January, and Powell’s in May. This gives Trump the opportunity to establish his long-term influence over the Fed now.

*This is not investment advice.