US President Donald Trump today threatened to fire Federal Reserve chief Jerome Powell from his separate position as a member of the Fed’s board of governors if he does not resign on his own when his term as Fed chairman expires on May 15.
Trump’s threats against Powell, including an investigative penalty against him, complicate the usually smooth handover of power at the Fed. For that reason, the Senate’s confirmation of the nomination of Kevin Wears, Trump’s pick to lead the Fed, could also be delayed. But the Republican president insisted today, in an interview with Fox Business, that the penalty investigation is a way to prove Powell’s “incompetence,” threatening that if he doesn’t leave the Fed entirely, he will fire him.
“You want to take Jay Powell out of the way?” the President was asked by Fox Business host Maria Bartiromo. “If he doesn’t leave on time – I restrained myself from firing him, I wanted to fire him, but I hate to cause controversy, you know. I like not to cause controversy, but he will be fired,” Trump responded. He gave no indication that the federal prosecutor for the District of Columbia, Janine Piro, would back down from her investigation into cost overruns in the renovation of the Fed building.
The administration could find itself in an awkward position if Powell remains on the seven-member Fed board. By controlling more seats, Wears would have more leeway to set monetary policy and implement the changes the White House is seeking. Trump has appointed only three of the seven members and the term of one, Stephen Miran, has already expired. If Powell remains as a ranking member, Miran will have to be removed so that Wears can take his place as the new head.
