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Donald Trump says it is highly unlikely he will fire US Fed chair Donald Trump says he discussed firing Fed boss but 'highly unlikely' he will
(about 1 hour later)
Trump on firing Powell: 'We're not planning on doing anything'Trump on firing Powell: 'We're not planning on doing anything'
President Donald Trump has said it is "highly unlikely" he will fire the chair of the US Federal Reserve, hours after asking lawmakers whether he should sack Jerome Powell.President Donald Trump has said it is "highly unlikely" he will fire the chair of the US Federal Reserve, hours after asking lawmakers whether he should sack Jerome Powell.
Stock markets and the dollar slipped following reports Trump had broached the idea with Republicans on Tuesday but quickly bounced back after he downplayed the discussions.Stock markets and the dollar slipped following reports Trump had broached the idea with Republicans on Tuesday but quickly bounced back after he downplayed the discussions.
Trump has repeatedly called on Powell to lower US interest rates in a series of highly critical outbursts. Dismissing the chair of the Federal Reserve would be a major break with precedent.
The attacks escalated last week when Trump allies accused Powell of mismanaging the renovation of Fed properties. Trump has repeatedly called on Powell to lower US interest rates in a series of highly critical outbursts, which continued on Wednesday when the president called him a "knucklehead" and claimed he was "doing a lousy job".
On Wednesday, Trump continued his criticism of Powell - who the president appointed during his first term - calling him a "knucklehead" and claiming he was "doing a lousy job". The president acknowledged that he had revived discussions about firing Powell - who Trump appointed during his first term - but said he was "not planning on doing anything".
He acknowledged that he had revived discussions about firing Powell, after appearing to shelve the idea earlier this year, but said he was "not planning on doing anything".
Pressed on whether he was ruling out the idea, he said: "It's highly unlikely unless he has to leave for fraud."Pressed on whether he was ruling out the idea, he said: "It's highly unlikely unless he has to leave for fraud."
Trump's allies have joined in the attacks against Powell, and last week accused the central bank boss of mismanaging the renovation of Fed properties.
Powell's second term as Fed chair ends in May next year. He can stay on as a governor of the central bank until 2028.Powell's second term as Fed chair ends in May next year. He can stay on as a governor of the central bank until 2028.
The Federal Reserve was established by Congress and has powers to set policy independent of the White House.The Federal Reserve was established by Congress and has powers to set policy independent of the White House.
US Federal Reserve chair Jerome Powell was appointed by Donald Trump in 2017
Powell has denied that the president has the authority to fire him, especially over a policy disagreement, but White House officials have said he can be removed for cause.Powell has denied that the president has the authority to fire him, especially over a policy disagreement, but White House officials have said he can be removed for cause.
Treasury Secretary Scott Bessent said earlier this week that a "formal process" was under way to identify a replacement for Powell. US Federal Reserve chair Jerome Powell was appointed by Donald Trump in 2017
The White House's increasingly hostile attitude to one of the most important independent institutions in the world is adding a new dimension to a fragile global financial system, which is already reeling from Trump's trade wars.
The US economy is slowing and facing stressors from the president's sweeping tariffs which economists have warned could fuel inflation.
As head of the Fed, Powell plays a key role helping to determine where the US central bank sets interest rates, a decision with implications for borrowing costs across the economy.
The key interest rate is currently hovering around 4.3% which is down from last year.
However, the Fed has not reduced it as quickly as other central banks such as the European Central Bank and the Bank of England - something Trump has highlighted.
The president is among those arguing that it should be lowered to make it easier to borrow and give the economy a boost.
Powell has said the bank, which is charged with keep inflation stable, should proceed cautiously given concerns that tariffs could raise prices.
Many economists and investors have warned that political interference in the leadership of the Fed could would risk undermining price stability and investor confidence.
Speaking to analysts earlier this week, the head of America's biggest bank warned that the Fed's independence was "absolutely critical".
Jamie Dimon, chief executive of JP Morgan Chase, said: "Playing around with the Fed can often have adverse consequences, the absolute opposite of what you might be hoping for."
Treasury Secretary Scott Bessent said earlier this week that a "formal process" was under way to identify a replacement for Powell. He described Trump's criticism of Powell as "working the refs" - alluding to efforts to pressure referees in sports games.
Trump has floated Bessent as a candidate. Others in the running include Kevin Hassett, who currently leads Trump's National Economic Council, and conservative economist Kevin Warsh.Trump has floated Bessent as a candidate. Others in the running include Kevin Hassett, who currently leads Trump's National Economic Council, and conservative economist Kevin Warsh.
Powell was nominated to lead the Fed by Trump in 2017, replacing Barack Obama's appointee Janet Yellen.Powell was nominated to lead the Fed by Trump in 2017, replacing Barack Obama's appointee Janet Yellen.
Former President Joe Biden extended his term in 2021.Former President Joe Biden extended his term in 2021.