President Donald Trump has denied plans to fire Fed Chair Powell amid renovation cost row but criticised his leadership, warning markets about risks if Fed loses independence. (Canva modified image: X/@AFpost· and @federalreserve)
US President Donald Trump pushed back on reports that he plans to fire Federal Reserve Chair Jerome Powell, calling them “not true,” according to a Reuters report published Wednesday. “I don’t rule out anything, but I think it’s highly unlikely unless he has to leave for fraud,” Trump reportedly said.
His remarks came in reference to the controversy over a $2.5 billion renovation of the Fed headquarters in Washington that has drawn criticism from the White House and some Republicans.
Meanwhile, stocks recovered some losses, and Treasury yields steadied after Trump’s remarks, the report said.
Despite his consistent criticism of Powell as a “terrible” Fed chair for not cutting interest rates more aggressively, Trump hinted that he was relatively wary than some Republican lawmakers on the idea of firing Powell. “I did talk with some Republican lawmakers about firing Powell,” Trump said, adding that he is “more conservative about it than they are.”
Reports suggest the White House recently intensified pressure on Powell over the Fed building renovation project. Russell Vought, director of the Office of Management and Budget, sent Powell a letter expressing that Trump was “extremely troubled” by cost overruns, as reported by Reuters. Powell, for his part, is reported to have then requested that the Fed’s inspector general review the project and release a fact sheet to address some of the accusations.
Trump has been at loggerheads with Powell for months in a row now, frustrated by the latter’s refusal to cut interest rates quickly. Powell, nominated by Trump in 2017 and renominated by then President Biden, has stressed on the Fed’s dual mandate of maximising employment while also stabilising prices.
Meanwhile, experts have warned that politicising the Fed could risk destabiliSing US financial markets.
ALSO READ: Trump Considers Firing Fed Chair Jerome Powell Over Building Renovation Dispute: Reports
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