President Donald Trump has renewed his threat to fire Federal Reserve Chair Jerome Powell, saying he’s “not happy” with him over interest rates and suggesting he could remove him from the position if he wanted to.
Trump’s comments come amid a dispute between the president and the Fed chair over interest rates. The Fed has raised rates to slow borrowing and spending, which Trump believes is not necessary given his view that inflation is under control. However, Powell and most other Fed policymakers have maintained that they are keeping rates on hold due to the uncertainty created by Trump’s tariffs.
The Fed is led by Powell, who was initially nominated by Trump in 2017 but was reappointed by Democratic President Joe Biden in 2022. The Fed chair has stated that the central bank is independent from politics and will make decisions based solely on what’s best for all Americans.
Trump’s criticism of Powell stems from his view that interest rates are still rising despite his claims of low inflation. He says the Fed is playing politics, but Powell and other policymakers argue that they have a duty to protect the economy and keep prices stable.
A case before the Supreme Court could potentially make it easier for a president to fire top officials at independent agencies like the Fed. However, Trump has stated that he would allow Powell to serve out his term as chair if given the opportunity.
The dispute highlights the ongoing tension between the presidency and the Federal Reserve, with both sides disagreeing on economic policy. The Fed’s decision-making process is guided by its dual mandate of maximum employment and price stability, which could be impacted by Trump’s tariffs.
As the economy slows down due to higher inflationary pressures and slower growth, Powell’s mandate is to stabilize prices and maximize employment. With the economy weakening because of Trump’s moves, it appears that the president is looking to pin the blame on Powell.
Source: https://apnews.com/article/trump-powell-federal-reserve-fed-termination-b6148c8048dda538a6ca3b5a270fd09e