President Trump announced Wednesday that he does not intend to dismiss Federal Reserve Chairman Jerome Powell, despite an ongoing criminal investigation into Powell’s conduct. During a Reuters interview, Trump stated, “I don’t have any plan to do that,” when questioned about Powell’s job security.
The investigation revolves around allegations regarding the Federal Reserve’s renovation of its headquarters, which has reportedly exceeded its budget by approximately $1.5 billion. Despite Trump’s long-standing criticism of Powell for not reducing interest rates swiftly enough, he indicated that decisions about the Fed leadership remain in a “holding pattern.” Trump claimed that he is considering alternative candidates, including former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett, to potentially replace Powell once his term expires in May.
Powell has generally refrained from directly addressing Trump’s criticisms but defended himself against the federal investigation, suggesting it is politically motivated. He emphasized that no one, including the Fed chair, is above the law, but warned that the inquiry could undermine the independence of the Federal Reserve. This sentiment has resonated with a wide range of political figures, including Republican Senator Thom Tillis, who cautioned against approving any candidates related to the investigation. Additionally, JPMorgan Chase CEO Jamie Dimon previously dismissed Trump’s offer of the Fed chairmanship as a joke.
As Trump’s administration faces scrutiny ahead of the midterm elections, he continues to advocate for lower interest rates to improve economic perceptions among voters.
Key points:
- Why this story matters: The investigation into Powell raises concerns about the independence of the Federal Reserve, a crucial institution in U.S. economic policy.
- Key takeaway: Trump’s intention to retain Powell, despite conflicts, reflects the administration’s struggle with managing economic expectations ahead of elections.
- Opposing viewpoint: Critics, including lawmakers and former officials, argue that undermining the Fed’s independence could have negative consequences for economic stability.
