Less than a day after telling a group of House Republicans that he planned to sack the Federal Reserve chairman Jerome Powell after months of grousing over interest rates he says remain too high, President Donald Trump on Wednesday backed down from the unprecedented move as it appeared to reach a boiling point.
In an Oval Office press opportunity, Trump told reporters it was “highly unlikely” that he would upend nearly a century of precedent by attempting to sack Powell, whom he appointed during his first term in office.
Sitting alongside the Crown Prince and Prime Minister of Bahrain, Trump was asked whether he was considering attempting to remove Powell from his position, a move that would potentially trigger months of litigation and shake up financial markets.
He replied with a derisive set of remarks in which he assailed Powell for not pushing the central bank’s board to cut interest rates, citing the European Central Bank’s multiple rate cuts in recent months, and accusing Powell of only having assented to cuts during last year’s election to benefit the Democratic candidate, former vice president Kamala Harris.
“The only time he cut him was just before the election to try and help Kamala or Biden, whoever the hell it was, because nobody really knew … I think he does a terrible job. He’s costing us a lot of money,” Trump said.
But the president noted that he isn’t planning to fire Powell, an affirmation that critics are sure to liken to another notion that has ruffled the president’s feathers of late, that “Trump always chickens out” after taking a hard stance on an issue, earning him the acronym, TACO.
“No, we’re not planning on doing anything,” he said. “So he’s doing a lousy job. But no, I’m not talking about that. We get, fortunately, we get to make a change in the next, what, eight months or so, and we’ll pick somebody that’s good.”
The president’s denial appeared to be a reversal of his attitude compared to less than 24 hours before, when according to CBS News, he polled a group of Republican lawmakers on whether he should sack the central bank boss during a Tuesday night meeting in the Oval Office after the 12 House Republicans blocked a cryptocurrency bill favored by the president.
The New York Times reported separately that Trump had shown lawmakers a draft of a letter to Powell informing him that he’d been fired.
One of those lawmakers, Representative Anna Paulina Luna of Florida, took to X following the meeting to proclaim that Powell’s ouster was “imminent,” causing sell-offs in futures trading overnight.
Trump confirmed the reporting on the meeting, telling reporters on Wednesday : “I talked to them about the concept of firing him. I said, ‘What do you think?’ Almost all of them said I should. But I’m more conservative than they are.”
Under Supreme Court precedent and standing federal law, the chairman of the Federal Reserve board can only be removed “for cause.”
Some of Trump’s allies in the administration and on Capitol Hill have been assailing Powell over a longstanding effort to renovate the Fed’s Washington, D.C. headquarters, accusing the central banker of unspecified fraud over the costly fix-up project.
Last week, Office of Management and Budget director Russ Vought sent and released publicly a letter to Powell in which he claimed that Trump was “extremely troubled” by what Vought called his “mismanagement of the Federal Reserve System.”
“Instead of attempting to right the Fed’s fiscal ship, you have plowed ahead with an ostentatious overhaul of your Washington, D.C. headquarters,” he added.
Vought also suggested that Powell had misled Congress about the renovation project, writing that his testimony “raises serious questions about the project’s compliance with the National Capital Planning Act.”
Trump alluded to the controversy even after he denied plans to fire Powell, telling reporters he wasn’t categorically ruling out sacking him.
“I don’t rule out anything but I think it’s highly unlikely unless he has to leave for fraud,” he said.
The president has continued to lash out at Powell, who he first named to his position during his first term, with epithets ranging from calling him “very stupid” to insulting him as a “low IQ” person and suggesting that the central banker “hates” him.
