President Donald Trump is open to the idea of firing Federal Reserve Chair Jerome Powell, Reuters reported on Wednesday, citing a source. According to the report, Trump recently sought some Republican lawmakers’ opinion through a vote about removing Powell, and reportedly received positive responses.
Trump Eyes Powell’s Handling of $2.5B Project As Grounds to Fire Him
Trump is seemingly eyeing Powell’s handling of a $2.5 billion renovation project for two Federal Reserve buildings in Washington as grounds to fire him, according to a report published by The Associated Press Wednesday. The project, work for which has been underway since Trump’s first term, is believed to have recently caught the White House’s attention.
“When you spend $2.5 billion on, really, a renovation, I think it’s really disgraceful,” Trump said, per the AP, adding, “I never saw the Fed chair as someone who needed a ‘palace.'”
The latest development comes after months of tension simmering between Trump and Powell, with the US president repeatedly pressuring the Fed chair to cut interest rates, aiming to reduce government borrowing costs. Powell, however, has refused to cut interest rates, warning that premature cuts could worsen inflation and eventually increase borrowing costs.
Firing Powell Could Trigger Market Turmoil, Experts Say
Meanwhile, economists and analysts have warned that firing Powell could trigger market turmoil. The Federal Reserve’s independence is considered critical for maintaining stable financial markets. Politicising the Fed might undermine America’s financial markets, possibly leading to a meltdown in stocks and investors charging a premium to lend to the US economy, experts say.
Powell and the Fed board are tasked with balancing maximum employment and stable prices, sometimes requiring unpopular moves like raising interest rates.
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