Trump criticized Powell and declared that the president has the right to step down as the chairperson of the Federal Reserve, mainly because he expressed strong dissatisfaction with the Fed’s delay in cutting interest rates, considering Powell’s performance “terrible”, and publicly denied the claim that the Fed has “independence”.
From a historical and legal perspective, the independence of the Federal Reserve has been the core principle of the US financial system since its establishment in 1913. The chairperson of the Federal Reserve is nominated by the president and approved by the Senate. She is directly accountable to Congress. Moreover, her term of office is staggered from that of the president, and her funds are independent. All these ensure that the Federal Reserve can independently formulate and implement monetary policies and avoid being manipulated by the president. So, Powell once said that according to US law, Trump has no right to dismiss him.
Despite Trump’s repeated public criticism of Powell and his private discussions over the past few months about firing him, even having talks with former Federal Reserve Governor Kevin Walsh about having him succeed Powell, he has yet to make a final decision on whether to oust Powell before his term ends next year. Moreover, US Treasury Secretary Basent also opposed Trump’s intention to remove Powell. Walsh also suggested not firing Powell, believing that he should be allowed to end his term without interference.
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