Trump says has ‘no intention’ of firing Fed chief Powell
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Mr Trump had criticised Mr Powell for warning that the White House’s sweeping tariffs policy would likely reignite inflation.
PHOTO: REUTERS
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WASHINGTON - US President Donald Trump said on April 22 he had no plans to fire the Federal Reserve chief, in apparently conciliatory remarks after berating him and triggering market turmoil.
Wall Street investors dumped US assets on April 23, with all three main indexes down after Mr Trump took a series of swipes at Mr Jerome Powell, head of the US central bank.
The President had criticised Mr Powell for warning that the White House’s sweeping tariffs policy would likely reignite inflation.
“I have no intention of firing him,” Mr Trump said on April 22.
“I would like to see him be a little more active in terms of his idea to lower interest rates – it’s a perfect time to lower interest rates.
“If he doesn’t, is it the end? No.”
Mr Trump’s recent outbursts against Mr Powell had fanned concern that he would oust him, and White House economic adviser Kevin Hassett said last week the President was looking at whether he could do so
Mr Trump has repeatedly said he wants rate cuts now to help stimulate economic growth as he rolls out his tariff plans, and had threatened to fire Mr Powell if he does not comply.
“If I want him out, he’ll be out of there real fast, believe me,” Mr Trump said on April 17.
Inflation fears
Mr Powell has said he has no plans to step down early, adding that he considers the bank’s independence over monetary policy to be a “matter of law”.
Many economists agree that the administration’s tariff plans – which include a 10 per cent “baseline” rate on imports from most countries – will put upward pressure on prices and cool economic growth.
Asked about the possibility that the US executive branch tries to fire Mr Powell before the end of his term, European Central Bank chief Christine Lagarde told CNBC on April 22 she hoped this was “not on the table”.
The US President does not have direct authority to fire Federal Reserve governors, but Mr Trump could initiate a lengthy process to attempt to unseat Mr Powell by proving there was cause to do so.
Mr Powell had earlier warned that Mr Trump’s sweeping tariffs could put the Fed in an unenviable position of having to choose between tackling inflation and unemployment.
Closing before Mr Trump’s remarks, Wall Street stocks rebounded on April 22 after US officials were upbeat about trade talks with China.
All three major US indexes rose following White House Press Secretary Karoline Leavitt’s comments that Mr Trump was “setting the stage for a deal with China”.
Briefing.com analyst Patrick O’Hare put part of the rebound down to sentiment that Mr Trump would not fire Mr Powell, and instead was “simply setting him up now to take the blame in the event of an economic downturn”. AFP
