US President Donald Trump has discussed a replacement of Federal Reserve Chairman Jerome Powell, according to a media report. Trump’s disappointment over Powell had become stronger after the interest rate hike on Wednesday and the months with losses on the stock market, reported the news agency Bloomberg, citing four familiar with the process people today.
The president has privately spoken in recent days about a firing Powells. The presidential office and the Federal Reserve (Fed) did not want to comment on it, according to the report. Trump himself had nominated Powell as Fed Chairman a good year or so ago. In recent months, however, he criticized the rate hike of the central bank under Powells leadership several times sharply. Trump fears that the central bank’s approach could stifle the recovery of the US economy.
Four times higher interest rates this year
With the economy booming, the Fed has raised interest rates four times this year to keep inflation in check, most recently on Wednesday at a range of 2.25-2.5 percent. She wants to fulfill her mandate to promote full employment and stable prices. In view of a foreseeable economic slowdown, it is aiming for only two interest rate hikes in 2019.
The Fed is independent and not subordinate to the government. But Trump had criticized the Fed’s rate just before the recent raise in a Reuters interview and said he thought a further rate hike was stupid. He needed the flexibility of low interest rates to support the US economy in the trade dispute with China.
At Powell, however, these attacks sparked off, „Nothing will put the Fed off course if we think it’s the way forward,“ he said at the recent rate hike. Any attempt to fire Powell could be seen as undermining the independence of the central bank and causing financial market turmoil.
