The White House raised the specter of firing central bank head Jerome Powell over 'ostentatious' $2.4 bln renovations. Even if this flimsy ploy or other gambits to sway leadership work, there are 12 members with a say on rates. A battle to break norms won’t end with one man.
FOTO DE ARCHIVO. El presidente de Estados Unidos, Donald Trump, observa mientras Jerome Powell, su candidato para convertirse en jefe de la Reserva Fed eral de Estados Unidos, habla en la Casa Blanca en Washington, EEUU, el 2 de noviembre de 2017. REUTERS/Carlos Barría
Trump has made no secret of his antipathy for Powell, dubbing him “too late” for not lowering interest rates. Sidelining him has proved difficult, though: his term runs until May 2026, and the nation’s top court said in May that Fed leaders are insulated from arbitrary dismissal. Firing for cause, however, remains legally plausible. The agency’s costly renovations have sparked accusations that it is gilding its monetary palace with terrace gardens and apiaries.
The administration’s economic policy would emerge weaker from a battle. Even if Trump gets to install a more dovish chair, this person will have to contend with a 12-member, consensus-based committee that sets policy and may bristle at attacks on its independence, especially since its credibility is so crucial to market stability. Trump has conventional picks more amenable to his outlook – like current Governor Christopher Waller, perhaps – when Powell eventually leaves.
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