Saturday, December 22, 2018

REPORT: Trump Discussing Firing Federal Reserve Chairman Jay Powell

Trump and Jay Powell

UPDATE below: Trump says Powell is going to turn him into Herbert Hoover.

UPDATE below: Mnuchin on his discussion with Trump about firing Powell

President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses, according to four people familiar with the matter, reports Bloomberg.

In other words, Trump is continuing with his unconventional style of leadership across the board.
Bloomberg continues:
Advisers close to Trump aren’t convinced he would move against Powell and are hoping that the president’s latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump’s advisers have warned him that firing Powell would be a disastrous move.
Yet the president has talked privately about firing Powell many times in the past few days, said two of the people.
Of course, the real danger is that Trump would replace Powell with a big-time money printer since Trump has called for the Fed to keep rates low. This could lead to very strong price inflation down the road.

But, according to Bloomberg, it is unclear how much legal authority the president has to fire Powell. The Federal Reserve Act says governors may be “removed for cause by the President.” Since the chairman is also a governor, that presumably extends to him or her, but the rules around firing the leader are legally ambiguous, as Peter Conti-Brown of the University of Pennsylvania notes in his book on Fed independence, The Power and Independence of the Federal Reserve.


From the New York Times:
In recent days, Mr. Trump has asked aides whether he can fire Jerome H. Powell, the Fed chairman he appointed, telling advisers that Mr. Powell will “turn me into Hoover,” a reference to the Great Depression-era president

1 comment:

  1. Sure, people question the legal authority to fire a Fed governor, but nary a peep about the legal authority to bomb people overseas.