As US equity markets continue to fall - and recession calls mount from establishment elites, despite strong 'hard' data' - President Trump lashed out at Fed Chair Powell via TruthSocial this morning exclaiming that Powell's termination from his position can’t come quickly enough, arguing that the US central bank should have lowered interest rates already this year, and in any case should do so now.
The ECB is expected to cut interest rates for the 7th time, and yet, "Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete "mess!”
Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS.
Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.
Powell's termination cannot come fast enough!
In Europe, trade wars are dovish:
Reuters reports that the ECB decision to cut rates for a 7th time was unanimous as even some of the more hawkish rate setters agreed the global trade was has significantly altered the outlook.
In a news conference in November, Powell was asked whether he would step down if Trump asked him to resign.
Powell gave an unusually blunt answer: "No."
He later added that the removal or demotion of top Fed officials was "not permitted under the law."
The President of the United States cannot unilaterally fire the Chairman of the Federal Reserve before the end of their term, except under specific legal conditions. Here’s a structured breakdown:
Appointment Process:
The Fed Chair is nominated by the President and confirmed by the Senate for a 4-year term, which is renewable. The Chair also serves as a member of the Federal Reserve Board of Governors, who have 14-year terms.Legal Framework:
The Federal Reserve Act allows the President to remove a Board member (including the Chair) only “for cause” (e.g., misconduct, neglect of duty). This does not include policy disagreements or political differences.
This provision ensures the Fed’s operational independence from short-term political pressures, safeguarding its role in managing monetary policy.Historical Context:
Past presidents (e.g., Nixon with Arthur Burns, Reagan with Paul Volcker) have faced limitations in influencing Fed Chairs. While they could apply political pressure or decline reappointment, outright removal was not legally feasible without just cause.
Courts have historically upheld the Fed’s independence, reinforcing that “for cause” requires a high threshold, such as ethical violations or incapacity.Practical Implications:
A President can indirectly influence the Fed by shaping its leadership through appointments (when terms expire) or public persuasion. However, abrupt removal to impose preferred policies would face legal challenges and undermine institutional credibility.
Treasury Secretary Scott Bessent earlier this week indicated that the administration’s timeline for considering Powell’s successor was roughly six months away.
Speaking in a Bloomberg Television interview, Bessent said that the timing for interviewing candidates to replace Powell was “sometime in the fall.”
Bessent also said that Fed independence in deciding on monetary policy was a “jewel box that has got to be preserved.”
We suspect some of Trump's frustration comes from the fact that China's PBOC is doing 'whatever it takes' to prop up their economy/market (take your pick)...
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