President Donald Trump is considering firing the chairman of the Federal Reserve because of his decision to raise interest rates, according to a new report from Bloomberg published shortly before midnight.
Such a move by the president would create chaos, roil the stock markets and cause great uncertainty for investors around the globe. And, according to Bloomberg, firing the Fed chairman “would send shock waves through the entire financial sector.”
“NEW: Trump has discussed firing Fed Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses, according to four people familiar with the matter”
NEW: Trump has discussed firing Fed Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses, according to four people familiar with the matter https://t.co/h1SaeSdtLm
— Bloomberg Politics (@bpolitics) December 22, 2018
The Bloomberg report said that Trump has “discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified.” Unsurprisingly, Trump is blaming Powell for the last several months of stock-market losses.
Political analysts have said for some time that Trump was planning to use economic growth and stock market gains as the cornerstone of his 2020 presidential re-election campaign. If the stock market continues to go down, this will take away the president’s biggest campaign talking point, and he has few other successes to brag about, or to justify his re-election.
Bloomberg also reported that several of Trump’s advisers have reportedly warned him against such a drastic, misguided and unprecedented move. As usual, the president’s advisers are powerless and can do nothing but hope that he drops the idea.
According to Bloomberg it is not even clear that Trump even has the ability to fire Powell.
The Federal Reserve Act says governors may be “removed for cause by the President.” Since Powell is a governor, that apparently means he can be fired “for cause.” But this term is not well defined, and the rules for firing the Chairman of the Federal Reserve are ambiguous, according to legal experts.
Regardless, Trump has still discussed firing Powell “many times” over the past week, which saw historically high stock-market declines.
According to Peter Conti-Brown, a professor at the University of Pennsylvania’s Wharton School and author of the 2016 book “The Power and Independence of the Federal Reserve,” Trump “would create chaos in financial markets if he ousted Federal Reserve Chairman Jerome Powell.”
Most people — and all past presidents — know that firing a Fed chairman would be disastrous for the global economy and financial markets. But Donald Trump seems to make decisions based on his emotions, rather than reason.
If he gets in a bad mood watching Fox News this morning, it is very possible that Trump will pick up his smart phone and start tweeting. And once he does that, he may — on a whim — decide on his own that it is time to do what no other president has done before: fire the Chairman of the Federal Reserve.
As long as Donald Trump is president the entire country — in fact the entire world — is at the mercy of his whims. It is now long past the time when this illegitimate president should be removed from office.
I am a lifelong Democrat with a passion for social justice and progressive issues. I have degrees in writing, economics and law from the University of Iowa.