Waller: If president asked me to do Fed chair job I’d say yes

Waller: If president asked me to do Fed chair job I’d say yes

In a recent development, President Trump has expressed his dissatisfaction with Federal Reserve Chair Jerome Powell, raising questions about the independence of the central bank. During a meeting with lawmakers, Trump reportedly inquired about the possibility of firing Powell, a legally untested move that has sparked debate among financial experts and lawmakers.

Powell, who was appointed by Trump in 2017, has been a target of the president's criticism due to the Federal Reserve's decision to keep interest rates relatively high. Trump has argued that the Fed's actions are hindering economic growth and has called for immediate rate cuts. Despite his criticism, Trump has stated that he is highly unlikely to fire Powell, although he has not ruled out the possibility entirely.

The Federal Reserve's dual mandate of maximizing employment and minimizing inflation has led to a delicate balance in monetary policy. Powell's tenure has seen the Fed lower interest rates to near zero during the COVID-19 pandemic and subsequently raise them to combat inflation. The Fed's recent cautious approach has not appeased Trump, who has publicly criticized Powell and the Fed's decisions.

The independence of the Federal Reserve is a cornerstone of U.S. monetary policy. The structure of the Fed, with board members and chairs serving across multiple administrations, ensures that the central bank operates independently from political influence. However, the possibility of Trump firing Powell before his term ends raises legal and market concerns. Federal law allows the president to remove board members only "for cause," and the Supreme Court has exempted the Federal Reserve from such removals, labeling it a "uniquely structured, quasi-private entity."

Powell's tenure as Fed chair will end in May 2026, but his term as a member of the Board of Governors extends until January 2028. Despite Trump's public criticism, Powell has maintained his position and defended the Fed's decisions and independence. The ongoing tension between the president and the Fed underscores the delicate balance between political influence and central bank independence.

References:
[1] https://www.cbsnews.com/news/what-does-the-federal-reserve-do-and-why-is-trump-mad-at-its-chair-jerome-powell/