Reports of Trump Firing Powell Bring More Uncertainty to CRE Market
By Andrew Coen July 16, 2025 3:00 pm
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Reports of President Donald Trump moving closer toward efforts to fire Federal Reserve Chair Jerome Powell have put the central bank’s independence in the spotlight for the commercial real estate industry.
President Trump drafted a letter firing Powell that he showed to roughly a dozen House Republicans Tuesday night and indicated he would likely move ahead with the decision, the New York Times and Bloomberg reported Wednesday. Trump later denied the report, saying the White House was “not planning on doing it” and that a Powell firing was “highly unlikely,” according to CNBC.
Whether Trump ultimately removes Powell from the Fed leadership post he was nominated to in 2018 — or even has the authority to do so — the possibility of such an unprecedented move has brought concern to the CRE industry regarding political influence from the White House guiding interest rate decisions. Trump attacked Powell in April over not cutting interest rates early this year while saying he had the power to remove him. The president later backed off on the threat.
“A move by the executive branch to replace the chairman would seriously impair this independence, introducing the risk of political considerations influencing rate decisions,” said Sam Chandan, founding director of the Chen Institute for Global Real Estate Finance at New York University’s Stern School of Business. “Such interference would likely result in interest rates that are set below levels consistent with maintaining price stability, thereby increasing the probability of higher and more persistent inflation.”
Under Powell, who Trump nominated in late 2017, the Fed took a hawkish stance to combat inflation with 11 interest rate hikes out of 12 meetings implemented between March 2022 and July 2023 when President Joe Biden was in office. The central bank later cut interest rates by 100 basis points in late 2024 before pausing in each of its four meetings of 2025.
The second term of Powell, who Biden renominated in 2021, is slated to run until May 2026. His term as a Fed governor lasts until January 2028.
Andrew Coen can be reached at acoen@commercialobserver.com
