“I think it sort of is.”
So declared President Donald Trump in response to a gaggle of reporters who are apparently chomping at the bit to see what the 47th president will or will not do with Jerome Powell, who is currently serving as Chairman of the Federal Reserve.
Though Trump originally appointed Powell, he has made no secret of his displeasure with the chairman as of late, sparking numerous rumors of the potential for sudden dismissal each and every time he opted to meet with Powell.
In a way, the Supreme Court had already indirectly voted against Trump’s ability to fire Powell, which was rather evident in an unsigned opinion that stressed the unique nature of the Federal Reserve.
“The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the Supreme Court noted in a recent decision.
Though the decision upheld Trump’s ability to fire the heads of other agencies, the justices did indicate that the Federal Reserve was distinct due to its central banking functionality.
Referring to the Federal Reserve as both the First and Second Bank of the United States also seemed to illuminate the fact that tinkering with Powell’s position could also tinker with the nation’s finances.
Though Trump is clearly far too ticked off at Powell to contemplate tinkering at length.
And now that the Federal Reserve is set to undergo (likely) ill-timed renovations that cost upwards of ten figures … well, Powell has surged to Trump’s attention once again.
“I think he’s terrible. I think he’s a total stiff. But the one thing I didn’t see him is a guy that needed a palace to live in,” Trump huffed to reporters.
In other words, Trump is definitely not a fan of the $2.5B renovation plan.
And, according to a recent report from The Hill, Trump may well use that $2.5B as potential justification for ousting Powell.
The Federal Reserve Act holds that the board of the Federal Reserve may
“maintain, enlarge, or remodel any building or buildings so acquired or constructed,” and the board also retains “sole control” of those particular buildings.
However, as with other situations, Trump has demonstrated that executive authority may intervene as he deems appropriate … and he does not appear amenable to the objectives or even mandates of various boards.
Other Republicans have also shied away from whether or not Trump would be exceeding his authority in ousting Powell.
One of the more prominent Republicans includes House Speaker Mike Johnson.
“Can the president fire Jerome Powell? I’m really not sure,” Johnson mused.
Well then.
Powell himself has also openly responded in a letter, in which the chairman argues that he and the board always “take seriously the responsibility to be good stewards of public resources.”
Paul Schiff Berman, a law professor at George Washington University, certainly believes that firing Powell would be disastrous for the nation.
“I think there would be strong arguments even if Trump tried to fire Powell for cause that the rationale being given is neither sufficient to show malfeasance and that it’s probably pretextual, because it’s clear that he has long wanted to fire Powell regardless, for political reasons,” Berman declared.
Or macroeconomic reasons.
In either scenario, it is clear that the Federal Reserve appears poised for facing more than one headwind in the future.
Author: Jane Jones
