President Donald Trump announced on Wednesday he was “highly unlikely” to remove Federal Reserve Chairman Jerome Powell, a public announcement made barely 24 hours after telling him in a private meeting that he was inclined to oust the top official of the country’s central bank.
Trump Discussed Powell’s Removal With House Republicans
Trump said he had indeed discussed the “concept” with about a dozen House Republicans in a White House meeting on Tuesday night of removing Powell, long a target due to his refusal to cut interest rates as Trump desires.
“Almost every one of them said I should,” Trump said about the lawmakers who had come to talk to him about crypto legislation.
He said he was inclined in that direction, a White House official said. At that meeting, Trump brandished a letter regarding removing Powell, but an individual close to the issue explained that it was more or less a prop written by someone else and that Republican President Trump has not written such a letter.
Neither of the sources was supposed to make the private meeting public and spoke only on condition of anonymity.
Trump Clarifies Position During Oval Office Meeting
Trump said in his comment that he was “highly unlikely” to fire Powell — “unless he has to leave for fraud” — while having a meeting with Salman bin Hamad Al Khalifa, the crown prince of Bahrain, in the Oval Office.
In recent days, administration and White House officials have charged Powell with incompetence in managing a $2.5 billion overhaul of the Fed, as part of months of attempts by Trump to get rid of the politically independent central banker.
U.S. stocks were volatile as Trump addressed Powell on Wednesday. The S&P 500’s small morning gain translated into a 0.7% drop on initial reports that the president is considering dismissing the Fed chief. Stocks later cut their losses following Trump’s subsequent remark.
Bond Market Stays Calm Amid Uncertainty
Treasury yields also derviated in the bond market but remained generally peaceful.
They were among the most conservative lawmakers present, including members of the House Freedom Cause whose opinions are not necessarily held by other Republicans. Republicans in the Senate have been more cautious. Some have supported Powell’s record at the Fed while waiting for an inspector general’s examination of the construction project.
In a speech Wednesday, Sen. Thom Tillis, R-N.C., said if Powell is dismissed, “you are going to see a pretty immediate response”
“If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they’re making a huge mistake,” said Tillis, who has announced that he is not running for reelection.
GOP Senators Back Powell’s Independence
Sen. John Kennedy, R-La., said this week that Powell “has done a decent job.”
“I don’t think he’s been perfect,” he said, adding that there have been times they disagreed, but “I do believe that the chairman is calling them like he sees them.”
Republicans on the House Financial Services Committee were originally supposed to sit down with Powell on Wednesday night in a meeting arranged months in advance, but it was suddenly canceled because of votes within the House, a committee aide who was given anonymity to speak about a private session said.
