President Donald Trump's recent calls for the " termination" of Federal Reserve Chairman Jerome Powell have reignited fears about the future of U.S. monetary policy and the independence of the central bank. But former Fed insiders and economists say concerns about Powell's imminent departure, or an institutional crisis, are likely overblown.

Instead, they suggest a more strategic political dynamic may be unfolding: Trump could keep Powell on to serve as a convenient scapegoat should the economy take a turn for the worse.

Trump has ramped up criticism of Powell in recent days, denouncing interest rates as too high and demanding cuts even as inflation continues to exceed the Fed's 2% target. Meanwhile, the president's tariff policies are expected to weigh on growth and increase inflationary pressures, placing even more scrutiny on the central bank.

Speculation about the legality of firing Powell has focused, in part, on concerns about a pending Supreme Court case that challenges a precedent prohibiting presidents from firing certain federal officials for political motives. Still, some former Fed and government officials see a different calculation at work.

"Trump does always want someone else to be the scapegoat," said Former Federal Reserve vice chair Alan Blinder.

Jared Bernstein, chief White House economist under President Joe Biden, wrote in an essay Friday that "it's entirely possible Trump's setting up Powell not to be replaced but to stick around as the fall guy should...rising recession probabilities -- purely a function of Trump's actions -- prove correct."

The pattern isn't new. As Vincent Reinhart, the chief economist for BNY Mellon Asset Management and a 24-year Fed veteran, put it, politicians want to be able to protect themselves from voter blame. "They've created an institution that they can blame for economic downturns," he said.

"What better thing to do than serve up Powell in the headlines, say that he's doing things wrong and that you are desperate to get rid of him, but that the Washington swamp has made it impossible," Reinhart said. "If things get worse, it was Jay Powell's fault, and if things get better, you overcome Jay Powell's reluctance and then you get to replace him anyway when the time comes."

Powell's term as Fed chair extends through May 2026, and he has repeatedly said that he intends to serve out his term. Powell said in a November press conference that he wouldn't leave if the president asked him to go and that he didn't think he was legally required to do so.

On Wednesday, Powell elaborated, saying Fed independence is a "matter of law." Speaking at the Economic Club of Chicago, he said that this independence is "very widely understood and supported in Washington and in Congress, where it really matters."

Even if Trump doesn't attempt to force Powell's removal, his administration may be considering other ways to undermine the Fed's credibility.

In response to Trump's criticism of Powell last fall, now-Treasury Secretary Scott Bessent suggested to Barron's the possibility of creating a "shadow Fed chair."

That would involve unofficially nominating Powell's successor well before his term ends and allowing the appointee to publicly influence market expectations through their guidance. The strategy could undermine Powell's influence by signaling a future shift in monetary policy.

The White House and Federal Reserve didn't respond to requests for comment.

Trump's current attacks on Powell come at a precarious time. "Liberation Day tariffs damaged confidence in the U.S. currency and in financial assets such as Treasuries," said Christopher Leonard, author of The Lords of Easy Money, a book about the history of the Fed. "That raises the stakes at this moment of attacking the independence of the Federal Reserve. It could create a spiral of uncertainty and hasten exits from U.S. assets."

Gary Schlossberg, a strategist for Wells Fargo Investment Institute, echoed those concerns. "Even if [Powell] isn't removed, it's that tacit pressure that can influence and perhaps even distort monetary policy at a critical turning point," he said.

Any perception that the Fed is bending to political pressure could also be damaging. If rate cuts are interpreted as a political concession the markets may believe the central bank "blinked."

That matters because inflation expectations are often as much about psychology as about policy. If consumers and businesses stop believing that the Fed will hold the line on inflation, they will adjust their own behavior by raising prices and demanding higher wages, further entrenching inflation.

While there is a long political history of Fed criticism, Blinder noted that the separation of the White House and the central bank has been widely accepted as a principle of monetary policy since the Clinton administration adopted a "no comment on the Fed" stance in the early 1990s.

Powell and other Fed officials have thus far maintained a "wait and see" approach to interest-rate changes, notwithstanding political pressure. Investors are heeding inflation data and Fed officials' "dot-plot" economic and rate forecasts more than political noise. Fed policy is ultimately determined by the 12-member Federal Open Market Committee, not by Powell alone.

Trump's latest attacks may or may not lead to a showdown over Powell's job. The real concern is whether investors believe that Fed officials are still calling the shots.