Trump denies plan to fire Fed chair Powell after markets react
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More news: President Donald Trump said he is not planning to fire Federal Reserve Chair Jerome Powell, contradicting earlier reports quoting a White House official who said he was likely to do so soon.
The reports had triggered a drop in stocks and the dollar, and a rise in Treasury yields.
What they said: “We’re not planning on doing anything,” Trump told reporters at the White House. He added, “I don’t rule out anything, but I think it’s highly unlikely unless he has to leave for fraud,” referencing Republican criticism over cost overruns in the US$2.5 billion renovation of the Fed’s headquarters.
After Trump’s remarks, stocks bounced from session lows, with the S&P 500 little changed, two-year yields dropped four basis points to 3.90%, and the dollar pared losses but remained 0.2% lower after Trump denied he plans to fire Powell.
Trump asks GOP if he should fire Fed chair Powell, White House source tells media it’s likely
The news: US President Donald Trump asked House Republicans in the Oval Office on Tuesday (Wednesday AEST) night if he should fire Federal Reserve Chair Jerome Powell, and people in the room voiced approval, according to reports. Several said Trump indicated he will do it.
A senior White House official told media including Bloomberg and CNBC that Trump is likely to fire Powell soon, though a final decision has not been made.
The context: The meeting followed Republicans blocking a procedural vote on cryptocurrency legislation backed by Trump.
Trump has repeatedly criticised Powell over the Fed’s decision to hold interest rates steady, and more recently used cost overruns in renovations at the Fed’s headquarters to increase pressure on him and raise the possibility of a for-cause firing.
Federal law states that the Fed chair can be removed “for cause,” and according to CBS News sources, the White House has not formally built a legal predicate.
Powell has said presidents have no legal authority to fire or demote Fed leaders except “for cause.” And a recent Supreme Court ruling said the president can remove officials from independent agencies like the National Labor Relations Board, but said that decision did not necessarily apply to the Federal Reserve because it is a “uniquely structured, quasi-private entity.”
What they said: Anna Paulina Luna, a Florida Republican who on Tuesday voted against advancing the crypto legislation, wrote in an X post, "Hearing Jerome Powell is getting fired! From a very serious source."
She later added, “I’m 99% sure firing is imminent.”
