Trump Suggests He Could Consider Demoting Fed Chairman -- Update

Date : 06/19/2019 @ 2:12AM
Source : Dow Jones News

Trump Suggests He Could Consider Demoting Fed Chairman -- Update

By Paul Kiernan 

WASHINGTON -- President Trump ratcheted up pressure on the Federal Reserve ahead of a major interest-rate decision, suggesting Tuesday he could consider demoting its chairman depending on the outcome.

"Let's see what he does," Mr. Trump said Tuesday when asked by a reporter if he wanted to demote Fed Chairman Jerome Powell, whom he nominated to the position in 2017.

Bloomberg News reported earlier Tuesday that, in February, the White House Counsel's Office weighed the legality of stripping Mr. Powell of his chairmanship but leaving him on the Fed's board of governors.

Prior to Mr. Trump's remarks, the president's top economic adviser, Lawrence Kudlow, declined to comment on the Bloomberg story but denied that the White House was considering whether to demote Mr. Powell.

Mr. Trump has called repeatedly on the Fed to lower interest rates to boost the economy, and spoke as central bank officials are considering whether to cut rates amid rising trade tensions and slowing global growth. The Fed is set to announce its decision Wednesday at 2 p.m. EDT, after the conclusion of a two-day policy meeting.

Legal experts say it is unclear whether Mr. Trump has the authority to remove Mr. Powell as chairman before his term as Fed chief expires in 2022. Earlier this year, Mr. Trump appeared to acknowledge that he didn't believe he could, telling Mr. Powell in a phone call, "I guess I'm stuck with you," The Wall Street Journal reported.

A Fed representative said that under the law the Fed board chair can only be removed for cause.

Mr. Powell and other Fed officials have frequently said they won't bow to political pressure, often noting that the central bank is technically accountable to Congress.

When asked in January whether he would resign if the president requested it, Mr. Powell responded "No."

Write to Paul Kiernan at paul.kiernan@wsj.com

 

(END) Dow Jones Newswires

June 18, 2019 20:57 ET (00:57 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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