President Donald Trump has told confidants as recently as Wednesday that he believes he has the authority to exchange Jerome Powell as chairman of the Federal Reserve Board, according to the people familiar with the matter.
In Trump’s line of thinking, he may demote Powell to be a board governor, but, isn’t planning to take action now, the people added.
Their reason for the president’s conversations emerged just hours after Powell mentioned he intends to serve his full four years term despite Trump’s continuing criticism of Fed policy. Earlier this year, Trump requested White House attorneys to explore choices for removing him, Bloomberg reported on Tuesday.
Trump’s attacks on the Fed are a departure from almost three decades of caution in the White House about making public comments on monetary policy, out of respect for the independence of the central bank.
“I believe the law is clear that I have a four-years’ time, and I intend to serve it,” Powell stated at a news conference in Washington on Wednesday after policy makers met to discuss rates of interest. They left the benchmark rate unchanged, while opening the door to a rate cut later this year.
White House lawyers think there is a way to follow through with a demotion if that’s what the president wants, but there has been some disagreement in the Counsel’s office, according to a person familiar with the matter.
Asked about the president’s belief that he could demote Powell, a White House leader declined to comment on a decision that was not currently being carried out.
Acting White House Chief of Staff Mick Mulvaney and Trump’s chief economic adviser Larry Kudlow also declined to remark whereas at an occasion for the economist Arthur Laffer, who received the Presidential Medal of Freedom.