According to President Donald Trump, the banker he picked to lead the Federal Reserve is “WRONG.” His reports are a “complete ‘mess!’” And his termination “cannot come fast enough!”
These kinds of remarks would be extraordinary for any other resident of the White House. Presidents are normally deferential to central bankers and avoid lobbying for monetary-policy changes in order to maintain the markets’ faith in the Fed’s independence. Not Trump. He has blasted the Fed dozens and dozens of times over the years, labeling its policies “ridiculous,” calling its officials “pathetic” and “boneheads,” and branding Jerome Powell an “enemy.”
The markets (and Fed officials) have largely shrugged off this jawboning and name-calling. Trump hasn’t swayed the central bank’s policy in any appreciable way, and Powell—again, a Trump nominee—has proved a deft leader of the central bank.
But interest rates are climbing and growth is falling, giving Trump trillions of reasons to get rid of the Fed chair. A pending court case might grant the president the capacity to remove him without cause, in contravention of current law.