Pompliano Warns Trump Against Firing Fed Chair Powell: "Very Bad Precedent to Set"

Crypto entrepreneur Anthony Pompliano has cautioned U.S. President Donald Trump against following through on his recent threat to fire Federal Reserve Chair Jerome Powell, warning that such a move would set a “very bad precedent” and further politicize an already fragile economic system.

Speaking in a video posted to X (formerly Twitter) on April 18, Pompliano emphasized that while the Federal Reserve may not be as independent as it claims, firing its chair over a policy disagreement could have damaging consequences.

“I do not believe that the President of the United States should come in and unilaterally fire the Fed President,” said Pompliano. “Where you have a disagreement and then the firing — I think that’s not really the area that we want to go into.”

Trump's Criticism of Powell Escalates

Trump took to his platform Truth Social on April 17 to blast Powell for being “too slow” to cut interest rates, writing:

“Powell’s termination cannot come fast enough!”

The former president’s comments have reignited debate over the Fed’s independence and its role in setting monetary policy without political interference. While Trump cannot directly fire Powell without cause, some legal scholars argue that the President could attempt to demote him from chair to board member — a move that would likely prompt legal and market turmoil.

Anthony Pompliano made the remarks on his online show “From The Desk of Anthony Pompliano.” Source: Anthony Pompliano

Pompliano: Fed Isn’t Perfect, But Firing Isn’t the Solution

Pompliano, a longtime critic of the Federal Reserve, acknowledged the institution's flaws but stressed that retaliatory action by the executive branch could weaken trust in the U.S. economic system.

“The Fed, I think, is highly politicized, even though they pretend not to be,” he said. “But just because somebody else is doing something wrong doesn’t mean that you should do something wrong.”

He warned that politicizing the Fed further could erode investor confidence and damage the credibility of U.S. financial institutions.

Echoes from Capitol Hill

Pompliano's concerns echo those of Senator Elizabeth Warren, who earlier this week warned that firing Powell would undermine the credibility of U.S. capital markets.

“A big part of our economy being strong — and a big part of the world economy being strong — is the idea that the big pieces move independently of politics,” Warren said in a CNBC interview.

She also warned that such a move could spark a financial crash by introducing uncertainty around the central bank’s decision-making process.

Rates, Crypto, and Market Liquidity

While Trump is pushing for rate cuts to inject more liquidity into the economy, which historically benefits risk-on assets like Bitcoin and tech stocks, Pompliano emphasized that sound governance and market trust are equally important.

Bitcoin and other digital assets have often rallied during periods of low interest rates and quantitative easing. However, Pompliano noted that forcing a policy shift through political pressure — rather than economic indicators — could destabilize the broader market.

Meanwhile, Powell Talks Stablecoins

In a separate development, Powell acknowledged the growing relevance of crypto and stablecoins. During an April 16 panel at the Economic Club of Chicago, he said a legal framework for stablecoins would be a “good idea” given the sector’s increasing mainstream appeal.

“The climate is changing, and you’re moving into more mainstreaming of that whole sector,” Powell said, noting that Congress is actively considering legislation.

In Summary:

Pompliano’s warning adds to growing concerns that Trump’s pressure on the Fed could damage institutional credibility, politicize monetary policy, and destabilize markets. While interest rate cuts might support crypto prices in the short term, the long-term costs of eroding central bank independence could outweigh the gains.