El-Erian Urges Jerome Powell To Resign As Trump Ramps Up Fed Attacks

“Powell should step aside for the good of the nation-it’s better than what’s playing out now.” That’s the blunt assessment from Mohamed El-Erian, one of the world’s most respected economists, as the Federal Reserve faces an unprecedented firestorm from President Donald Trump’s administration. In a move stunning Wall Street and Washington alike, El-Erian declared that Chair Jerome Powell’s resignation is the only way to defend the Fed’s battered independence, after months of growing political interference, allegations of “mission creep,” and now a ballooning scandal over lavish building renovations.

The Independence Crisis: Trump Tightens His Grip On The Fed

The battle for the soul of America’s central bank has never been more intense. The Trump administration, fresh off its 2024 reelection sweep, has put the Federal Reserve and Powell directly in the crosshairs. The President did not mince words, blasting Powell for what he calls dangerous mismanagement and suggesting that his removal “cannot come fast enough”-a threat aimed squarely at dismantling the last vestiges of the Fed’s autonomy. According to The Washington Post, Trump’s criticism has reached a fever pitch, accusing Powell of holding back the economy.

Fueling the flames, Treasury Secretary Scott Bessent has turned up the heat, calling for a sweeping probe of the Fed’s effectiveness and singling out Powell for what Bessent says is a stubborn refusal to cut interest rates despite runaway inflation. Bessent even branded the Fed’s army of economists as little more than “UBI for academic economists”-a jab that makes clear even career staff are in the firing line.

“If Powell’s objective is to safeguard the Fed’s operational autonomy, he should resign,” El-Erian said, tearing up the Wall Street playbook and sending shockwaves through the global financial community.

But Washington’s wrath doesn’t stop at policy. The Trump administration has opened an explosive investigation into the Fed’s $2.5 billion headquarters renovation-now some $700 million over budget. The project, originally billed as a routine update, is being wielded as a cudgel against Powell and his allies in Congress. According to a recent CNBC report, the renovation scandal has handed Trump potent political ammunition as he calls for new leadership at the bank.

Wall Street Roiled: El-Erian’s Bombshell Shakes the Establishment

For decades, the Federal Reserve has been fiercely guarded from political pressure-a bulwark against rash decision-making and partisan chaos. But Trump’s relentless campaign has eroded that firewall, and now El-Erian, the president of Queen’s College at Cambridge and Allianz chief economic advisor, has broken ranks with his Wall Street peers to declare that entrenched resistance is no longer working. That kind of candor from a figure of El-Erian’s stature is rare, especially as most of the financial establishment still insists Powell should serve out his term until May 2026.

Axios reports that El-Erian is one of the first prominent economists to publicly call for Powell’s resignation as a shield against political interference, even acknowledging that such a step is far from ideal. The reason? In El-Erian’s view, markets would be less rattled by a resignation than by the endless drip of scandals and attacks. He points to the fact that several of the rumored candidates for the top job are credible figures who understand the vital importance of Fed independence-a dig at critics who claim a new appointment would only invite more chaos.

“While Powell’s resignation is not the first best outcome, it is preferable to enduring these escalating threats to the Fed’s independence that are likely to worsen if he remains,” El-Erian noted in a scathing interview.

Those close to the situation say the pressure is already spooking global markets. The dollar seesawed on rumors out of the White House, and uncertainty over the Fed’s direction has caused fissures across the banking sector. Meanwhile, Powell faces the impossible task of crafting policy amid political pyrotechnics, global trade tariffs, and the spiraling Israel-Iran conflict. It’s no wonder El-Erian and others believe the institution’s credibility is at a breaking point.

This isn’t just elite punditry, either-conservatives on social media have torched Fed leadership. “Why won’t Powell just get out of the way and let Trump fix the mess?” blared one post with over 50,000 shares. “Drain the Fed swamp!” demanded another. The populist base, emboldened by Trump’s second mandate, wants action-not administrative stonewalling.

Bitter Lessons: What’s At Stake For America’s Economic Future?

The stakes, as El-Erian and countless conservatives see them, could hardly be higher. The recent unraveling at the Fed has set the stage for a bitter fight over America’s economic destiny-one that could derail recovery and undermine faith in every institution that keeps our economy running.

It’s not just about interest rates or renovations gone awry. According to a Financial Times deep dive, Secretary Bessent is openly questioning whether the Fed is fit for its purpose, calling out Powell for sidestepping inflation challenges and failing to serve the real needs of Main Street. The idea that the Fed has strayed from its true mandate, instead dabbling in “mission creep,” now dominates conservative rhetoric from Capitol Hill to the campaign trail.

“Every day Powell stays, the threat of permanent political colonization at the Fed grows,” warned a former Trump economic advisor. “It’s time for someone who respects this presidency-and the voters’ power-to clean house.”

Meanwhile, Trump critics warn that the unraveling of the Fed’s independence could leave the nation’s monetary system at the mercy of political whims and short-term election cycles. Former Fed chairs Ben Bernanke and Janet Yellen, no strangers to political pressure themselves, have publicly warned about the catastrophic consequences of undermining the central bank’s credibility. Yet, their voices are drowned out by a tidal wave of populist anger and hardball tactics coming out of 1600 Pennsylvania Avenue.

Looking ahead, the 2026 midterm elections loom large. Republicans in Congress have already signaled that Fed reform will top their economic agenda, echoing Trump’s demand for discipline and transparency-and hinting that Powell’s resignation could pave the way for a more “America First” era inside the central bank’s marble halls.

This isn’t just a personnel drama-it’s the battleground for the very future of American prosperity. As financial markets hold their breath and Main Street looks for hope, only one thing is certain: the era of quiet, technocratic central bank rule is over. It’s time for accountability and patriotic leadership at the highest levels of economic power.