Trump Want to Fire Fed Chair
Trump Want to Fire Fed Chair
President Trump’s top economic adviser told reporters Friday the White House is exploring how to fire Federal Reserve Chair Jerome Powell despite the legal guardrails on his position.
Kevin Hassett, chair of the White House National Economic Council, backed away from his previous concerns about Powell’s firing and said the White House was looking for ways to replace the Fed chief.
“The president and his team will continue to study” if Powell can be fired, Hassett told reporters at the White House.
Hassett served as the chair of the White House Council of Economic Advisers during Trump’s first term, during which the president frequently criticized and threatened to fire Powell.
Trump’s anger with Powell reignited this week after months of the president becoming increasingly critical of the Fed chief.
Trump blasted Powell in a Thursday morning social media post for refusing to cut interest rates, saying he couldn’t wait for the Fed chair’s “termination.” His criticism came a day after Powell warned that Trump’s tariffs could cause economic growth to stall while inflation increases — a dynamic known as “stagflation” — which would likely keep the Fed from being able to cut rates.
The president escalated his attacks Thursday afternoon, insisting Powell would leave if he attempted to fire him.
A 90-year-old Supreme Court precedent likely protects Powell from being fired by the president for anything other than misconduct or severe neglect of office. And Powell has repeatedly insisted he cannot legally be fired and would refuse to leave until the end of his term.
During Trump’s first term, Hassett declared Powell “100 percent safe,” even as the president raged against the Fed chief — a lifelong Republican whom Trump himself appointed to the job — for refusing to cut interest rates.
Hassett recounted in his 2021 memoir that he and other Trump advisers warned the president that firing Powell may not actually be possible and would likely crash financial markets regardless of its legality.
When pressed on that opinion Friday, Hassett said “the market was in a completely different place” at that time, and his comments were limited to the first Trump White House’s legal analysis.
Hassett also took shots at Powell’s leadership of the Fed and the bank generally, accusing them of orchestrating an interest rate increase as soon as Trump took office.
“I’d like to think of the policy rather than the personality. And the policy of this Federal Reserve was to raise rates the minute President Trump took office last time,” Hassett said.
The Fed hiked interest rates in December 2016 under former Fed Chair Janet Yellen, one month before Trump took office and a year after its most recent interest rate hike. At the time, Powell was a member of the Fed’s board of governors.
The Fed hiked rates three more times under Yellen as it braced for inflation that never materialized. Powell was confirmed as Fed chair in February 2018 and presided over four rate hikes, three of which were reversed the following year.
Hassett also claimed Powell has expressed inconsistent alarm about federal spending and debt under Trump and former President Biden.
“Having everybody that refused to warn about the runaway spending out there, saying, ‘Oh, this is going to be a catastrophe for inflation because of the tariffs,’ means that people need to improve their models and improve their messaging,” Hassett said.
Powell, however, has warned under both Trump and Biden that the U.S. was on an “unsustainable” fiscal path and needed to pay down its debt.
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