President Trump asked about the idea of firing Federal Reserve President Jerome Powell this week, in a meeting with MPs, CBS News has toldA legally unused step that is the time of criticism of the Fed leader, which is flattened by Mr. Trump.
The President caught his hand with a fed chair – which he has “called”Nambscul“A” Trump Hatters and A “Stubborn“-This year has so far focused on the Central Bank’s decision to keep the interest rates relatively high, part of a inflation-fighting campaign. Mr. Trump has also targeted Powel’s Federal Reserve Office Renovation Project.
Mr. Trump asked a group in House Republican if he should fire Powell during the Oval Office meeting on Tuesday night, sources told CBS News Early this weekThe President told reporters a day later “highly unlikely“He would set fire to Pavel, although he confirmed that he talked to MPs about” the concept of firing him “and almost everyone said that I want me. ,
Who is Jerome Powell, and who appointed him?
Powell is the chairman of the Board of Governors of the Federal Reserve.
Powell was earlier nominated as Fed Chair by Mr. Trump During his first termJanet Yellen in place of Obama, and Senate Confirmed that In 84-13 votes. Former President Joe Biden Nominated him in second termKeeping him in office till May 2026.
“He is strong, he is committed, he is smart,” Mr. Trump said speech Announcing his decision to nominate Powell in 2017, praising Powell’s reputation as a “consensus-building”.
Last month, however, Mr. Trump Said that he initially nominated Pavel Because he “listened to someone who should not have been heard, and Biden should not have appointed him again.”
Prior to the creation of the chair, Powell served at the Board of Governors of the Central Bank since 2012, when he was initially nominated by former President Barack Obama.
Powell has switched between the government and private sector jobs for his career. He Worked in investment banking In the 1980s and 1990s, former President George HW Bush was interrupted by a term as an undercretery of Treasury. For nearly 20 years, starting in the 1990s, he was a partner in the Carlile Group Investment Firm, according to his fed. Biography,
A Georgetown-educated lawyer, Powell Ph.D. In economics, some other former fed chairs.
Is Jerome Powell a specified word length?
Federal Reserve chairs work for four years of terms, so Pavel will end in May 2026 as a chair.
Members of the seven-member board of governors of Fed, however, serve for 14 years, and Powell Words as a board member Ends in January 2028. Yalen Resigned from the board After his tenure as a fed chair, and the Treasury Secretary Scott Besent Encouraged Pavel to follow the suitHowever Powell’s plans are not clear.
The chairman and board members are nominated by the President and confirmed by the Senate.
What does Federal Reserve do?
The Federal Reserve is United States Central Bank. 12 Regional Federal Reserve Banks and a DC-based board of governors, its responsibilities include regulating the American banking system, serving as a “lender of final measures” for banks and running a quick payment system.
But it has a role in establishing a monetary policy, one of the highest-profile responsibilities of the Federal Reserve. Through its 12-person the Federal Open Market Committee, including Powells, the Fed works independently of the officials elected to influence the supply of funds in the US economy and at interest rates on which it is lended, with one eye to keep the unemployment low and keep the prices stable.
They are known as two goals – maximizing employment and reducing inflation – the fed’s “double mandate”. But they are in conflict with each other. If the fed reduces interest rates, it can promote economic growth, but it also leads to the risk of overheating the economy and advancing inflation. And if interest rates increase, inflation cools down, but the economy slows down.
Interest rate called fed goals is called Federal fund rateThose banks charge each other for lending money overnight. But others Interest rates – From Mortgage rates To yield for American government bonds – Fed closely with the rate of federal funds, so the decisions of the fed affect the average American consumers and businesses for businesses.
It is not easy to choose the right balance, and Fed often faces criticism for its choice.
Under Powell, Fed Dropped your target interest rate In 2020, the Kovid -19 epidemic starts at the beginning of 0%, with the target of avoiding an economic devastation. But after the economy recovered and inflation, the central bank in 2023 increased the interest rates at its highest point in decades, aimed at bringing inflation under control. The Fed has devised a cautious route since then inflation fell as a slight cut last year, but keeping them stable so far this year.
Last month, the Fede’s rate-setting committee said it may cut rates at the end of this year, but there are concerns that inflation-which is still above the 2%-year-year target of the Fed. Powell is also Suggested that the fed is worried Mr. Trump’s tariff can increase inflation.
“For some time, we are well deployed to wait to learn more about the possible course of the economy before considering any adjustment of our policy stance,” Powell said last month.
Why are Trump Fed and Jerome Powell unhappy with Powell?
Mr. Trump is unhappy with the decision of the Fed to leave the rates stable. For months, the President pushed the Central Bank to slash the rates immediately, calling Powell “Mr. to Late”.
chairman Argued last month This inflation is already quite low to start cutting rates.
“If he was concerned about inflation or something else, he just has to do the rate that we have to reduce the rate, so we can take advantage of interest costs, and increase it in the future when and if these are ‘other elements’ (who doubt that they will do!),” Shri Trump. wrote,
That’s not First The President for criticizing the Fed for high interest rates, who makes everything more expensive from car loan to mortgage and can put a sponge on economic development that goes to create or break the popularity of presidents. But Mr. Trump has been unusually outspoken.
In post in mid -June True socialMr. Trump called Powell a “Kul and Purna Moran” and urged the rate-setting Federal Open Market Committee to “override” him. While the Powell Committee has only one of the 12 votes, the Speaker has traditionally played an external role in his decisions. Last some decision The steady is unanimous to leave the interest rates.
During the first term of Mr. Trump, there were similar issues with Powell, Saying During the earlier interest rate-hiking campaign in 2018, he was not a little happy with Powell’s “my selection”. When Fed cut rates in 2020, Mr. Trump called Powell as his “best player”.
Meanwhile, members of Trump Administration Pavel is pressurized In one year renewal in the headquarters campus of the Fed. In a letter to the central banker, the office office and budget director Russell Watt called some characteristics “hypocritical”, and alleged that Powell may have misled the Congress about the scope of the project or has changed the schemes without obtaining permission from the right federal bodies.
Mr. Trump has also criticized Powell on renewal. On Wednesday, Mr. Trump said that he is not very likely to “firing Powell” until he has to leave for fraud. “On other points, Mr. Trump suggested that Powell should resign on the project.
Powell Said last year If asked to do so, he does not resign as a chair.
Powell Protected the handling of the project’s fed In a letter to V bugging and denied the allegations that it was highly grand, saying that Fed “took great care to ensure that the project is careful carefully.” He also said that the project has been “subject to budget approval” by the annual board members. Powell said that Fed has only “a small number of design changes to” return some elements or eliminate certain elements “, so there is no need to review further government.
Fed usually works on its own budget, and legally with high levels of freedom Is power Washington, DC to buy and re -prepare office space, as it sees fit.
Is Fed independent of the rest of the government? And can Trump Powel set fire?
Fed structure – with board members and chairs that serve in many administration – allow it to make decisions directly without input from politicians.
Can the President set Pavel on fire before the end of his term, is legally unused. federal law They say Members of the Federal Reserve Board can only be removed by the President before the end of his terms, and to the Supreme Court. Found in 1935 The Congress is allowed to limit the base on which the President can set the members of independent federal boards on fire.
In May, High Court Permitted Sri Trump to set members of the federal labor boards on fire, but gave a discount to the Federal Reserve, which is “specificly structured, a semi-private unit, which follows in the specific historical tradition of the United States” the first and second banks of the United States. ,
Any attempt to set Powell on fire before the end of his term can also cry with financial markets, analysts and MPs. both parties Has warned. Mr. Trump accepted this risk on Wednesday, stating that Just news In an interview, “They say it will disrupt the market if I did.”
At some points in 112 years of Federal Reserve, including the central bank, including during World War II, has been more grateful For treasury needs. But fed Operated more independently Since 1951, when A Public disagreement Between Fed and Truman administration inspired the Treasury to agree to the central bank Set interest rates automatically,
The President has nothing to prevent the fed from expressing his views publicly, however, as many predecessors of Mr. Trump. During his campaign last year, Mr. Trump Said He must have “at least” [a] Say “in the tricks done by the central bank.
“In my case, I earned a lot of money, I was very successful, and I think I have a better instinct in many cases, people who will be on the Federal Reserve, or Chairman,” Mr. Trump said in a press briefing of August 2024.
White House press secretary Karolin Lewitt said in April that Mr. Trump “has the right to express his displeasure with Fed, and he has the right to say that he believes that interest rates should be low.”
