If President Donald Trump couldnt say, youre fired to Federal Reserve Chairman Jerome Powell, he at least wanted to say, youre demoted. According to a Bloomberg report on Tuesday, the Trump administration actively explored taking legal action to demote Powell -- an extraordinary and unorthodox move that calls into question the White Houses perception of the central banks independence -- and track record.
According to Bloomberg, the White House explored the legality of demoting Powell back in February, with the White House general counsels office weighing the legality of stripping Powell of his chairmanship and leaving him as just a Fed governor. The review came after President Donald Trump spoke of firing Powell, Bloomberg reported, citing people familiar with the matter.
Bloomberg said it didnt know the result of the administrations review. Trump has been a vocal critic of Powell, arguing the Fed chairman has stymied the ongoing U.S. economic expansion by raising the benchmark interest rate more than has been necessary. Trump last week told ABC Newss George Stephanopoulos that he disagreed entirely with Powells actions to raise rates to temper economic growth.
Frankly, if we had a different person in the Federal Reserve that wouldnt have raised interest rates so much we would have been at least a point and a half higher, Trump said, apparently referring to the pace of U.S. economic growth. The Feds decision-making committee, called the Federal Open Market Committee, will announce its decision on whether to cut rates at 2 p.
m. ET on Wednesday. Many economists and market watchers are anticipating the Fed wont cut its benchmark fed funds rate but could so at the meeting in July. The rate is currently 2.25%. As U.S. Economy Downshifts, Fed Chief Powell Prepares to Alter His Message Fed Watch Begins: Jim Cramer Talks Trumps Tweets and Facebooks Cryptocurrency What Investors Should Expect From Fed Chair Jerome Powell Economist Perspective: Will Fed Rate Cuts Work?,.