Report: Trump Eyes Yet Another Major White House Shakeup
President Donald Trump’s frustration with Federal Reserve policies has now reached the point where he is privately talking firing Federal Reserve Chairman Jerome Powell, according to a new report.
In a report without named sources, Bloomberg said Trump has talked of firing Powell because of an interest hike the Fed approved this week along with continued stock market losses.
The report said that removing Powell is not a done deal and that many advisers are urging Trump to keep Powell in place.
This week, the Federal Open Market Committee voted to raise the baseline interest rate range from 2.25 percent to 2.5 percent, something Trump opposed.
I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!
— Donald J. Trump (@realDonaldTrump) December 18, 2018
“We think this move was appropriate for what is a very healthy economy,” Powell said when the rate hike was announced, The New York Times reported.
Powell has indicated the Fed wants to control inflation without cutting off the economic expansion that has taken place since Trump took office.
“Over the past year, the economy has been growing at a strong pace, the unemployment rate has been near record lows and inflation has been low and stable,” he said. “All of those things remain true today.”
Powell said that two rate increases were likely in 2019; the Fed had earlier discussed three increases.
“The Fed is doing the right thing. The market needs to grow up and stop begging for easy money,” said Jack Ablin of Cresset Wealth Advisors, according to the New York Post.
However, the announcement triggered a major selloff on Wall Street.
Chairs of the Federal Reserve are nominated by the president, but removing them has little precedent. Powell’s predecessor, Janet Yelle, resigned in 2017.
If Trump moves to oust Powell, it will be in the context of a vast White House shakeup that includes the departure of Defense Secretary James Mattis, Chief of Staff John Kelly and Interior Secretary Ryan Zinke.
This week’s rate increase was not the first time Trump has carped about the Fed’s actions under Powell.
“(A)t this moment in time I am not at all happy with the Fed. I am not at all happy with my choice,” Trump said in November, according to The Washington Post. “I’m not happy with the Fed. They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.”
“So far, I’m not even a little bit happy with my selection of Jay (Powell). Not even a little bit,” he said then.
Trump’s comments have been criticized as crossing the line that preserves the independence of the Fed.
“One of the hallmarks of our great American economy is preserving the independence of the Federal Reserve. No president should interfere with the workings of the Fed,” said former Dallas Fed President Richard Fisher, according to CNBC. “Were I Chairman Powell, I would ignore the president and do my job, and I am confident he will do just that.”
Truth and Accuracy
We are committed to truth and accuracy in all of our journalism. Read our editorial standards.
