The Trump president is again to short irons with the president of the Federal Reserve, Jerome Powellthat he would like fireeven if there are a series of reasons (regulations and economic) for which it cannot do it. And he raises his lament on social media and in front of the international press, criticizing the work of the banker, whom he himself confirmed at the head of the US Central Bank on the occasion of the first term to the White House.
Always “too late”
The day opened on social truth, belonging to Trump himself, where the president expressed his own discontent For the caution revealed by Powell.
“The ECB will cut the interest rates for the seventh time“, Trump had recalled before the Eurotower meeting, which actually cut the cost of money of 25 basis points.
“Nevertheless, The “too late” Jerome Powell of the Fed, which is always too late and in error, published yesterday a relationship that was yet another, and typical, complete ‘mess’ “said the president, referring to the speech pronounced by the president of the Fed to the Chicago club.
“Oil prices are falling, food (even eggs!) Are falling and the United States are becoming rich with duties. -said Trump -” Too late ” should have lower interest rateslike the ECB, a long time ago, but it should certainly lower them now. Powell’s resignation will never come quite quickly! “
If I wanted, Powell would be out
The same bad mood was revealed after meeting the Italian premier Giorgia Meloni. “If Europe reduces the cost of moneythis puts us in one disadvantaged position “said the president to reporters, referring to the effects on the changes and competitiveness of the USA.
The president said he was “Not happy” by Powell and admitted “I don’t think he’s doing a good job”. Then he added that Powell “plays with politics, interest rates should drop now”. “If I wanted Powell outside, it would be out,” Trump remarked, but he didn’t want to answer a question if he has the power to remove it.
Can Trump remove Powell?
From a regulatory point of view, the Federal Reservelike the ECB and other central banks, is equipped with independence. The governments in office can choose who guides the monetary authority, but his choices are independent, so this implies that the right to remain in place is also a confirmation of independence guaranteed by the Constitution. Powell was chosen by Trump during the first mandate and, if he now decides on two feet to revoke him, he would scarcely meet a judgment before the Supreme Court.
But the opportunity to revoke Powell goes far beyond regulatory and constitutional issues. The reasons for Trump’s stay of Powell and reticence to answer the question if he can remove it, have to do with the Market and economy stability.
According to Bloomberg, Trump would have repeatedly asked his if he can fire Powell. The same would have revealed the Wall Street Journal, according to which on the occasion of a lap of meetings at his summer residence in Mar-A-Lago, Florida, Trump would have confessed to Kevin Warshformer governor of the Fed, of wanting to send Powell away before the deadline and would have been strongly not recommended from doing it.
A signal that the market does not want
Also the Treasury Secretary Scott Bessent and the director of the Economic Council of the White House Kevin Hassett – adds the financial newspapers – they would have opposed the idea of fire to fire before the end of his mandate, in May 2026, putting on guard Trump from potential economic repercussions.
Bessent, in denying the President the possibility of interrupting the mandate of the President of the Fed early, would have spoken of the risk of “Detabilize” financial marketsalready hard to test by Trump’s duties, and create A shock wave able to overwhelm the economy.
Powell forward on his way
Powellfor its part, has already responded to Trump’s stresses. In a speech in front of the Chicago Economic Club, mid -week, the number one of the Fed explained that i duties they could cause temporary inflation and that could also have a more lasting impact. To avoid this effect, the extent of the effects and the transmission on prices must be evaluated well. Fed – the banker remarked – is obliged to keep long -term inflation expectations and at the moment it appears “well positioned for wait greater clarity“, Before evaluating actions on monetary policy and rates.
