Polymarket, a prediction market platform, saw its odds jump to approximately 27% in favour of Fed Chairman Jerome Powell’s ouster. After fiery criticism from President Trump and claims by Republican congresswoman Anna Paulina Luna, tweeted that his firing was “imminent”, although she offered no concrete proof. Since here tweet, markets are suggesting a slight cooldown, which shows growing skepticism about a forced exit.
According to a Reuters report, Polymarket’s contracts reflect two outcomes: either Powell being fired or him resigning. Some traders believe Trump’s relentless verbal attacks, could push Powell to quit. Still, bets on him resigning remains the underdog in these markets.
Legal & Institutional Safeguards
The legal path to firing is complex. Under U.S. law, the Fed chair can be removed only for causes such as “inefficiency, neglect of duty or malfeasance.” Historical precedent, such as the 1935 Humphreys’ Executor case, reinforces these protections. Consequently, markets and analysts view the chances as modest, though not negligible, given Trump’s potential to appoint a successor-in-waiting.
Treasury Secretary Scott Bessent has downplayed a firing, stating Trump isn’t seeking to remove Powell directly. However, he did confirm that there were talks underway about a “shadow” successor, highlighting ongoing transition planning.
If Powell does leave early, it could shake markets. Deutsche Bank flagged his forced exit as a severely “under‑priced event risk,” potentially triggering a dollar slump and yield spikes, Reuters reported. JPMorgan’s Jamie Dimon and others warn that political meddling could erode market confidence and fuel inflation expectations.
Shadow Chair Strategy
President Trump has persistently criticized Powell, calling him a “knucklehead” and likening speaking with him to “talking to a chair”. On several occasions, Trump has brought up the fact that Powell sanctioned $2.5 billion for renovations of the Fed HQ.
Trump has signaled interest in placing a more dovish chair. The names doing the rounds as possible contenders include Scott Bessent, Kevin Warsh, Kevin Hassett, Christopher Waller, and Judy Shelton. While the odds are stacked against Powell, He still holds the Federal Reserve Chair until May 2026.