President Trump Denies Intentions to Dismiss Federal Reserve Chair Jerome Powell Amid Ongoing Tensions
In a recent development, President Donald Trump has publicly refuted claims that he plans to remove Federal Reserve Chair Jerome H. Powell from his position, despite prior indications to the contrary. This comes just a day after a White House meeting where Trump inquired with Republican lawmakers about the possibility of firing Powell.
White House Meeting Sparks Speculation
During a session at the White House on Tuesday, Trump reportedly asked Republican members of Congress whether they supported the idea of dismissing Powell. According to two sources who spoke under anonymity, Trump appeared to lean toward the likelihood of executing such a move in the near future. These discussions fueled market jitters, with stock indices initially plunging on the news of a potential leadership change at the Fed.
Trump’s Public Denial and Market Response
However, when questioned on Wednesday about his intentions, Trump dismissed the reports, asserting that claims of a plan to fire Powell are “not true.” Following his statement, the stock market experienced a quick rebound, indicating investor relief. Despite this, the question remains whether Trump will follow through on his earlier threats, as he has frequently criticized Powell, primarily advocating for lower interest rates to help finance the growing federal deficit.
Potential Grounds for Removal and Legal Considerations
While Trump has toyed with the idea of dismissing Powell for some time, Wednesday’s comments marked a notable escalation. The president even suggested he might attempt to remove Powell “for cause,” citing the Fed’s expenditure on a costly renovation of its Washington headquarters as a possible justification. Trump stated, “We’re not planning on doing anything now, but I don’t rule out anything-unless he’s involved in fraud.”
Legal experts note that the Supreme Court has recently clarified that a sitting Fed chair can only be removed for cause-typically misconduct or dereliction of duty-not merely policy disagreements. Critics argue that the criticism over the renovations could be a veiled attempt to justify Powell’s removal, although such a move could trigger significant legal and political repercussions.
Historical Context and Market Implications
Historically, presidents have hesitated to pursue the ouster of a Fed chair, fearing market instability and a loss of confidence in the central bank’s ability to manage inflation. Advisers have previously warned Trump that firing Powell could lead to increased borrowing costs for the U.S. government and consumers-an outcome contrary to Trump’s goal of lowering interest rates to stimulate economic growth.
Currently, the Fed’s benchmark interest rate influences the rates on mortgages, car loans, and other consumer credit. Trump has publicly called for the Fed to cut rates by as much as 3 percentage points to ease the financial burden of federal deficits.
Powell’s Firm Stance and Political Misstatements
Jerome Powell has maintained his position, asserting he has no intention of resigning early and is prepared to resist any efforts to remove him. Meanwhile, Trump, in a surprising misstatement, claimed that Powell was appointed by President Biden, which is inaccurate. Powell was nominated by Trump in November 2017 and assumed office in February 2018. Biden subsequently renominated him, and Powell was sworn in for a second term in May 2022.
In the Oval Office, Trump criticized Powell, saying, “He’s a terrible Fed chair. I was surprised he was appointed, and frankly, I was surprised Biden kept him on.”
As the political and economic debate continues, the question remains whether Trump will pursue any formal action against Powell or if these remarks are merely rhetorical posturing. The situation underscores the ongoing tension between the executive branch and the Federal Reserve over monetary policy and economic management.
Contributing to this report, Maegan Vazquez provided additional insights into the evolving scenario.