Politics

/

ArcaMax

Trump denies plan to ax Powell after floating idea to lawmakers

Josh Wingrove, Annmarie Hordern and Kate Sullivan, Bloomberg News on

Published in Political News

WASHINGTON — President Donald Trump denied he is seeking to remove Federal Reserve Chair Jerome Powell, after raising the idea in a closed-door meeting with congressional Republicans that leaked to the media.

“No, we’re not planning on doing anything,” Trump told reporters on Wednesday. He later added, “I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud.”

A White House official, speaking on the condition of anonymity earlier Wednesday, said they expected Trump to soon move against the Fed chief after his meeting with members of Congress visiting the White House to discuss cryptocurrency legislation. Some lawmakers also left that Tuesday evening meeting with that impression, and Trump acknowledged that he had polled the participants about dismissing Powell.

The president’s remarks in the Oval Office left open the possibility of ousting Powell for cause. Trump and his allies have lambasted the Fed chair over the central bank’s decision to hold interest rates steady and the cost of the central bank’s renovations of its Washington headquarters.

The events marked the latest turn in the long-running saga between Trump and Powell. The president has repeatedly floated the prospect of firing the Fed leader over the bank’s monetary policy, but has stopped short.

Many analysts have warned that if Trump were to follow through on ousting Powell it would roil financial markets and lead to a consequential legal showdown over the independence of the central bank. But the reaction on Wednesday was muted.

On the early news that the president would likely make the move, stocks, the dollar and short-dated yields all declined, but showed no drastic repricing.

“The market did not react that badly before Trump disavowed the reports,” Derek Tang, an economist at LH Meyer/Monetary Policy Analytics in Washington, wrote in a note to clients. “Were it a trial balloon to test the waters, it was a success and might embolden Trump. Now the window of acceptability has shifted, for the worse.”

If Fed independence did get “broken,” Thomas Thornton, founder of the hedge fund Telemetry, said that would inject risk into the bond market. “with this potential of a Fed chair being ousted combined with the continued risk of high deficits and out of control US debt levels, the risk of the long-end rates spiking is increasing.”

As confusion swirled over Trump’s plans with regard to Powell Wednesday morning, chieftains of two of the biggest American banks emphasized the importance of the Fed’s autonomy from the political sphere.

“Fed independence, particularly on monetary policy, is super important,” Goldman Sachs Group Inc. Chief Executive David Solomon said on CNBC. “Stability in the Fed seat I think is important.”

Brian Moynihan, CEO of Bank of America Corp., said, “In a year we’ll have a new Fed chair because that’s the right of the president.” But right now “an independent Fed is critical” to the nation, he said on CNBC.

Trump has blasted Powell for what he says is the bank’s sluggishness on interest-rate cuts. The president has said he wants the bank to slash its benchmark rate, currently in a range of 4.25% to 4.5, by as much as 3 percentage points to lower federal borrowing costs.

 

The president on Wednesday again attacked Powell as a “knucklehead” who has been “too late” to lower rates. Trump initially nominated Powell to lead the Fed in 2017 and former President Joe Biden appointed him to another term in 2022, which expires next May.

“I was surprised he was appointed. I was surprised, frankly, that Biden put him in and extended him, but they did,” the president said.

Two individuals familiar with the meeting Tuesday night said Trump had displayed a letter authorizing Powell’s firing, but Trump on Wednesday denied that he drafted and displayed such a document. The president did say of the lawmakers in the room that “almost every one of them” supported the idea of removing the central bank chief.

Anna Paulina Luna, a Florida Republican who was among the holdouts on the cryptocurrency bill, wrote on social media that she had heard “Jerome Powell is getting fired! From a very serious source.”

In recent days, Trump and his allies have targeted the Fed headquarters project as a cudgel against Powell, arguing that the work has been plagued by cost overruns and is exorbitantly lavish for a government office building.

Powell has called media reports about the renovations inaccurate. Earlier this week, he made a formal request for the bank’s inspector general to review the renovation.

The dispute could carry legal significance if Trump does decide to move on Powell. Presidents lack the power to remove Fed officials without cause under the law, a provision that was bolstered by a Supreme Court ruling in May on Trump’s authority to oust members of independent government agencies.

Powell has maintained that a president has no legal authority to fire or demote those in leadership positions at the Fed. In April he said, “we’re not removable except for cause.”

Asked Tuesday if the renovation costs amount to a fireable offense, Trump said “I think it sort of is.”

The brouhaha over Powell took place as Trump in recent days sought to tamp down fissures within his Make America Great Again political movement over his administration’s handling of potential files related to the late, disgraced financier Jeffrey Epstein. In the Oval Office on Wednesday, Trump continued to field questions about the matter.

_____

(With assistance from Amara Omeokwe, Vivianne Rodrigues and Jeremy Herron.)


©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

Comments

blog comments powered by Disqus

 

Related Channels

The ACLU

ACLU

By The ACLU
Amy Goodman

Amy Goodman

By Amy Goodman
Armstrong Williams

Armstrong Williams

By Armstrong Williams
Austin Bay

Austin Bay

By Austin Bay
Ben Shapiro

Ben Shapiro

By Ben Shapiro
Betsy McCaughey

Betsy McCaughey

By Betsy McCaughey
Bill Press

Bill Press

By Bill Press
Bonnie Jean Feldkamp

Bonnie Jean Feldkamp

By Bonnie Jean Feldkamp
Cal Thomas

Cal Thomas

By Cal Thomas
Christine Flowers

Christine Flowers

By Christine Flowers
Clarence Page

Clarence Page

By Clarence Page
Danny Tyree

Danny Tyree

By Danny Tyree
David Harsanyi

David Harsanyi

By David Harsanyi
Debra Saunders

Debra Saunders

By Debra Saunders
Dennis Prager

Dennis Prager

By Dennis Prager
Dick Polman

Dick Polman

By Dick Polman
Erick Erickson

Erick Erickson

By Erick Erickson
Froma Harrop

Froma Harrop

By Froma Harrop
Jacob Sullum

Jacob Sullum

By Jacob Sullum
Jamie Stiehm

Jamie Stiehm

By Jamie Stiehm
Jeff Robbins

Jeff Robbins

By Jeff Robbins
Jessica Johnson

Jessica Johnson

By Jessica Johnson
Jim Hightower

Jim Hightower

By Jim Hightower
Joe Conason

Joe Conason

By Joe Conason
Joe Guzzardi

Joe Guzzardi

By Joe Guzzardi
John Micek

John Micek

By John Micek
John Stossel

John Stossel

By John Stossel
Josh Hammer

Josh Hammer

By Josh Hammer
Judge Andrew P. Napolitano

Judge Andrew Napolitano

By Judge Andrew P. Napolitano
Laura Hollis

Laura Hollis

By Laura Hollis
Marc Munroe Dion

Marc Munroe Dion

By Marc Munroe Dion
Michael Barone

Michael Barone

By Michael Barone
Mona Charen

Mona Charen

By Mona Charen
Rachel Marsden

Rachel Marsden

By Rachel Marsden
Rich Lowry

Rich Lowry

By Rich Lowry
Robert B. Reich

Robert B. Reich

By Robert B. Reich
Ruben Navarrett Jr.

Ruben Navarrett Jr

By Ruben Navarrett Jr.
Ruth Marcus

Ruth Marcus

By Ruth Marcus
S.E. Cupp

S.E. Cupp

By S.E. Cupp
Salena Zito

Salena Zito

By Salena Zito
Star Parker

Star Parker

By Star Parker
Stephen Moore

Stephen Moore

By Stephen Moore
Susan Estrich

Susan Estrich

By Susan Estrich
Ted Rall

Ted Rall

By Ted Rall
Terence P. Jeffrey

Terence P. Jeffrey

By Terence P. Jeffrey
Tim Graham

Tim Graham

By Tim Graham
Tom Purcell

Tom Purcell

By Tom Purcell
Veronique de Rugy

Veronique de Rugy

By Veronique de Rugy
Victor Joecks

Victor Joecks

By Victor Joecks
Wayne Allyn Root

Wayne Allyn Root

By Wayne Allyn Root

Comics

Dave Whamond Jeff Danziger A.F. Branco John Branch Joey Weatherford Michael de Adder