WASHINGTON - U.S. President Donald Trump has reportedly discussed firing Federal Reserve Chairman Jerome Powell.
The reports of Trump’s questions about whether he has the authority to fire Powell raised concern among members of Congress, economists and Wall Street executives, leading Treasury Sectary Steven Mnuchin to tweet a statement from the president late Saturday.
(1/2) I have spoken with the President @realDonaldTrump and he said “I totally disagree with Fed policy. I think the increasing of interest rates and the shrinking of the Fed portfolio is an absolute terrible thing to do at this time,...— Steven Mnuchin (@stevenmnuchin1) December 22, 2018
(2/2) especially in light of my major trade negotiations which are ongoing, but I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.”— Steven Mnuchin (@stevenmnuchin1) December 22, 2018
Bloomberg News was first to report Trump’s discussions about firing the Fed chairman. Citing four people familiar with the discussions, Bloomberg reported Trump has become more frustrated with Powell after months of stock market losses and the central bank’s interest rate hike Wednesday.
The Washington Post has also spoken with two people familiar with Trump’s questions about firing Powell, who confirmed Trump’s anger about Fed policy and desire to blame someone for the stock market’s recent huge losses.
Advisers reportedly have warned Trump that firing Powell would further roil financial markets, yet they said Trump has discussed the matter many times in the past few days.
Trump appointed Powell to the chairman’s position. A Federal Reserve chairman serves a five-year term, but in practice usually stays in office as long as he or she wishes. Legal experts say it is legally unclear if the president has the authority to fire a Fed chairman. The Federal Reserve Act says that a Fed chairman can only be removed “for cause.” That generally means for criminal activity or malfeasance.
A firing of Powell would come after weeks of heavy losses in the markets. On Friday, equities closed their worst week since 2008, with the S&P 500 Index plummeting more than 7 percent and the Nasdaq Composite Index plunging into a bear market.
Trump has been busy shaking up his administration since the November midterm elections. He has announced the departures of Attorney General Jeff Sessions, White House Chief of Staff John Kelly, Interior Secretary Ryan Zinke and Defense Secretary James Mattis. The U.S. envoy to the anti-ISIS coalition has also submitted his resignation.