Can Trump fire Fed Chair Jerome Powell? Experts weigh in
What's the story
US President Donald Trump has been vocal in his criticism of Federal Reserve Chair Jerome Powell, especially over a $2.5 billion renovation project and the Fed's decision not to lower interest rates further. The president's recent remarks have sparked speculation about whether he could actually fire Powell. However, legal experts say Trump's power to remove a Fed Chair is limited by federal law and the US Supreme Court.
Remarks
'It is highly unlikely I would remove...': Trump
On Wednesday, Trump told reporters it was "highly unlikely" he would remove Powell from his post. However, he did say that "unless he has to leave for fraud," he wouldn't mind acting. This was a departure from his more aggressive stance during a closed-door meeting with Republican lawmakers, where he even showed them a letter purportedly drafted for Powell's termination, according to numerous US media outlets.
Defense
Powell defended renovations before Congress
Powell defended the renovations before Congress on June 25, rejecting claims that the project included extravagant features. However, some of Trump's allies have criticized him. Bill Pulte, head of the Federal Housing Finance Agency, called Powell's testimony "deceptive," while Russell Vought, director of the Office of Management and Budget (OMB), accused him of mismanagement in a public letter.
Influence
Can the US president remove the Fed Chair?
Trump's power over the Fed is mainly through nominating people to the Board of Governors and filling leadership roles when terms expire. Powell's term as chair runs until 2026 and as a governor until 2028. However, past precedent shows most Fed chairs leave the board after stepping down from their chairmanship, but it isn't legally mandated.
Appointments
Trump's appointment of 'loyalists' to planning commission
Recently, Trump appointed three members to the National Capital Planning Commission, which oversees federal projects in Washington. The new appointees are seen as loyalists, raising concerns about the politicization of oversight mechanisms related to the Fed's operations. Even the mere suggestion of Powell's removal has affected financial markets, with the US Dollar Index falling by up to 0.8% on July 16 amid investor anxiety.