US President Donald Trump has privately discussed the possibility of firing Federal Reserve Chairman Jerome Powell, two sources familiar with the situation say.
The sources say however they do not expect Trump to dismiss the US central bank chief, despite the president’s objections to the Fed’s interest rate-hiking campaign and his repeated criticisms of Powell, whom he appointed.
US Treasury Secretary Steven Mnuchin, however, tweeted late on Saturday that Trump had told him that never suggested dismissing the Fed chief.
‘I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so,’ Mnuchin quoted Trump as telling him.
The White House and a Fed spokeswoman declined to comment.
An attempt to remove the Fed chairman would be unprecedented and seen as an attack on the US central bank’s independence, which is meant to insulate it from political considerations.
It would be on potentially shaky legal ground, and would probably hit financial markets around the globe hard.
The Federal Reserve Act allows a president to dismiss a Fed board member for ’cause’, and Trump’s frustrations with the central bank’s rate hikes would likely fall short of that mark.
The law, however, is untested on dismissing a chairman, who also holds a separate term as a board member.
Trump has frequently attacked Powell, who was sworn in as Fed chairman early last February, and the Fed for raising borrowing costs this year.
On Tuesday, Trump publicly warned against lifting rates when stock markets were slumping.
However the central bank lifted rates for the fourth time this year on Wednesday, citing the US economy’s continued strong performance.
US stocks and bond yields fell hard after the decision; the Dow Jones industrial average had its worst week since the 2008 financial crisis, while the Nasdaq sank into bear market territory.
Bloomberg News was the first to report that Trump has been privately discussing firing Powell.