President Donald Trump has hinted that he may try to fire Federal Reserve Chair Jerome Powell, citing Powell’s decision to keep interest rates steady despite his criticism over its impact on the economy.
Trump has been a vocal critic of Powell and the Federal Reserve for months, arguing that they have not done enough to lower interest rates at a faster pace. He recently called Powell a “Total and Complete Moron” for keeping rates steady and accused him of being a “dumb guy” who should have resigned.
However, it is unclear whether Trump has the authority to fire Powell before his term ends in May 2026. Federal law requires that members of the Federal Reserve’s Board of Governors be fired “for cause,” but the Supreme Court ruled last month that other independent federal agencies can be fired at the discretion of their bosses.
Powell has refused to resign, saying he will not step down if Trump asks him. The two met at the White House last month, and Powell expressed a desire to continue serving as Fed chief despite Trump’s criticism.
Trump argues that Powell is holding back on lowering interest rates too quickly, which could stifle economic growth. However, the Federal Reserve has argued that lowering rates too quickly could lead to inflation surging again.
The Fed’s decision to keep interest rates steady was met with backlash from Trump earlier this week. He called for immediate rate cuts and suggested that Powell should hike rates if inflation spikes. However, this approach is at odds with the Fed’s cautious strategy.
Trump’s criticism of Powell is not new, dating back to 2018 when he pushed back against the Fed’s interest rate hikes. However, he has also praised Powell in the past for his efforts during the pandemic.
Source: https://www.cbsnews.com/news/trump-says-maybe-try-to-fire-federal-reserve-jerome-powell-interest-rates