What if Trump Fires the Federal Reserve Chair? Impact on Travel

Every president wants lower interest rates – they keep voters happy. It’s the Fed’s job to ignore that. But financial markets may have already accepted where this is heading.

President Donald Trump is again flirting with firing Federal Reserve Chair Jerome Powell, who’s earned Trump’s ire for refusing to cut interest rates as quickly as the president wants.

“Oh, he's a knucklehead, a stupid guy,” Trump said of Powell Monday before circulating a letter among Republican congressmen Tuesday that would fire Powell. By Wednesday, Trump backed away, saying it’s “highly unlikely” he’ll oust the Fed chair.

Powell, who Trump nominated in 2017, is already set to leave the Fed in May 2026 when his term expires. Trump detractors are concerned the president will attempt to install a loyalist who erodes the independence of the nation’s central bank, which sets short-term interest rates as part of its dual mandate to keep inflation down and maximize jobs.

The drama – will he or won’t he fire Powell – won’t directly impact tourism and travel. But there are huge implications for the economy and financial markets. Among them:

Trump wants the Fed to slash interest rates, and that can give an immediate jolt to economic growth and lead to more jobs – and more travel. But there’s no free lunch: It can also stoke inflation, and higher prices could tak