White House economic adviser Kevin Hassett said on Friday President Donald Trump and his team were studying the matter when asked if firing Federal Reserve Chair Jerome Powell was an option, an indication that a matter of great consequence for the central bank's independence and for global markets remained under active consideration by the White House.

"The president and his team will continue to study that matter," Hassett said at the White House when a reporter asked if "firing Jay Powell is an option in a way that it wasn't before."

Hassett's exchange with the press came a day after Trump ramped up a long-simmering feud with the Fed chair, accusing Powell of "playing politics" by not cutting interest rates and asserting he had the power to evict Powell from his job "real fast."

Hassett appeared to distance himself from his 2021 book, "The Drift: Stopping America's Slide to Socialism," in which he argued that firing Powell during Trump's first term would have harmed the reputation of the Fed as an objective and independent manager of the nation's money supply and could have compromised the credibility of the dollar and crashed the stock market.

"I think that at that time, the market was a completely different place. And, you know, I was referring to legal analysis that we had back then. And if there's new legal analysis that says something different, then we need to rethink our response," Hassett said.

It was not immediately clear what new legal analysis he was referencing, but a case over whether Trump overstepped his authority in firing two Democrats from federal labor boards now pending at the Supreme Court is being closely watched as a potential precedent for whether Trump could remove Powell.

Powell has said that the law would not allow his removal, that he would not leave if asked to by Trump, and that he intends to serve through the end of his term in May 2026. Powell also said this week he does not think the current case on appeal at the U.S. high court will apply to the Fed.

Powell, first appointed to the Fed by President Barack Obama, was elevated to Fed chair by Trump during his first term, but the Republican president soon soured on him for raising interest rates. Trump repeatedly berated Powell in public and considered trying to fire him but never did.

The issue has arisen again in the last week with Powell and other Fed officials saying they believe Trump's aggressive tariffs could put them in a bind with the potential for them to push up inflation while harming overall economic growth and labor markets. Trump on Thursday chastised Powell again for not
cutting rates.

"The Fed really owes it to the American people to get interest rates down. That's the only thing he's good for," Trump said. "I am not happy with him. If I want him out of there he'll be out real fast believe me."

The Fed, after a series of rate cuts late last year, has left its benchmark policy rate on hold in the range of 4.25% to 4.50% since December.

Powell this week signaled that with uncertainty elevated about what effects will arise from the tariffs and other administration policies, he and his colleagues are in no rush to change their wait-and-see posture.

Hassett said he was focused on the Fed's policy actions, not the personalities, and took issue with the central bank's decision to raise interest rates during Trump's first term and to characterize tax cuts as inflationary, but to not take issue with "runaway spending" by former President Joe Biden, which Hassett said was "textbook inflationary."

"And so if you think that it's unacceptable for President Trump to be frustrated with the policy history of the Fed, then I think that you've got some explaining to do," he said.

Hassett said Trump's policies were boosting capital spending and job creation was increasing, while inflation was declining.

"And so against that backdrop to have everybody who refused to warn about the runaway spending, you know, out there saying, 'Oh, this is going to be a catastrophe for inflation because of tariffs,' means that people need to, like, improve their models and improve their messaging."

Economists and investors have been following the escalation with trepidation. The Fed's credibility as the
world's most powerful central bank rests largely on its historic independence to act free from political influence, and an effort to remove Powell could further roil markets already battered for weeks by Trump's erratic approach to imposing his new tariffs, with the rollout beset by a mix of delays, partial rollbacks and
escalations, with China in particular.

"A sudden crystallization of the threat to Fed independence would both intensify market stress and shift it in more of a stagflationary direction with a sharp increase in tail risk," Evercore ISI Vice Chair Krishna Guha said in a note.