By Steve Holland and Trevor Hunnicutt
WASHINGTON, Jan 14 (Reuters) – U.S. President Donald Trump said on Wednesday he has no plans to fire Jerome Powell despite a Justice Department criminal investigation into the Federal Reserve chair, but it was “too early” to say what he would ultimately do.
“I don’t have any plan to do that,” Trump told Reuters in an interview when asked if he would attempt to remove Powell from his job.
Asked whether the investigation gave him grounds to do so, Trump added: “Right now, we’re (in) a little bit of a holding pattern with him, and we’re going to determine what to do. But I can’t get into it. It’s too soon. Too early.”
Powell’s term as Fed chief ends in May, but he is not obligated to leave the Washington-based Board of Governors until 2028.
Trump suggested he was inclined to nominate either former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett to replace Powell. He also said he had ruled out U.S. Treasury Secretary Scott Bessent for the role, “because he wants to stay where he is.”
“The two Kevins are very good,” Trump said. “You have some other good people too, but I’ll be announcing something over the next couple of weeks.”
TRUMP DISMISSES CRITICISM OVER FED’S INDEPENDENCE
The Trump administration recently opened a criminal investigation into Powell over cost overruns for a $2.5 billion project to renovate two historical buildings at its headquarters complex. Powell, who disclosed the probe on Sunday, denies wrongdoing, and said the unprecedented actions are a pretext to put pressure on Powell for not satisfying Trump’s long-running demands for sharply lower interest rates.
Some key members of Trump’s Republican party in the Senate, which must confirm his nominee to succeed Powell, have joined foreign economic officials, investors and former U.S. government officials from both political parties in criticizing the move as politicizing sensitive policymaking. The Trump administration has said it has a duty to investigate potential wrongdoing.
Trump has heaped public pressure on Powell, whom he appointed as Fed chair during his first term in office, for not lowering benchmark interest rates either as quickly or as far as the Republican president prefers. Ahead of November’s midterm congressional elections, voters say cost-of-living issues are a key issue, and they rate Trump’s handling of it poorly.
Trump dismissed criticism, including from lawmakers whose support he’ll need to confirm his choice to succeed Powell. “I don’t care,” he said. “They should be loyal. That’s what I say.”
He also dismissed the widely held view among analysts, investors and economic policymakers around the world that eroding central bank independence could undermine the value of the U.S. dollar and spark inflation. “I don’t care,” he repeated.
A TEST OF THE PRESIDENT’S POWER
In his year in office, Trump has tested the limits of presidential power. Trump has attempted to fire another Fed official, Governor Lisa Cook, who has challenged her termination in a legal case that will be argued before the Supreme Court next week.
“A president should have something to say” about Fed policy, Trump told Reuters. “I made a lot of money with business, so I think I have a better understanding of it than Too Late Jerome Powell.”
(Reporting by Steve Holland and Trevor Hunnicutt;Editing by Dan Burns and Diane Craft)
Comments