President Trump says he has no plans to fire Fed Chairman Jerome Powell

According to The New York Times, President Trump said on April 22 that he has “no intention” of firing Federal Reserve Chairman Jerome H. Powell, although he continues to call on the central bank to lower interest rates. President Trump made the above statement at an event at the White House.

The possibility that Mr Trump might seek to interfere with the Fed - an institution that is politically independent - has spooked financial markets in recent days, leading to a wave of sell-offs in stocks, government bonds and the US dollar.

Mr Trump’s advisers have repeatedly warned that firing Mr Powell would cause both legal and financial problems – and that the uncertainty could send a huge shockwave through markets.

At least for now, Mr. Trump seems convinced, according to information from The New York Times last week.

The US President's anger at Mr. Powell stems from his desire for the Fed to quickly lower interest rates, while the central bank has so far been hesitant to do so.

In a speech last week, Mr. Powell warned that the tariffs imposed by Mr. Trump were likely to push up U.S. inflation and slow economic growth more than the Fed had initially anticipated. Mr. Powell’s emphasis that the Fed has an “obligation” to ensure that price pressures do not turn into a sustained inflationary problem suggests that the threshold for the central bank to act on interest rates remains high.

Those comments sparked a furor from Mr. Trump, including a hint that he might fire the Fed chairman. On April 21, Mr. Trump renewed his call for lower interest rates, asserting that there is “virtually no inflation” in the United States and that the cost of energy and “most everything else” is falling.

“With costs coming down so well - just as I predicted - there is virtually no chance of inflation, but there could be a slowdown if Mr. Late, a loser, does not lower rates now,” Mr. Trump wrote on social media, referring to Mr. Powell.

On April 22, Mr. Trump continued to emphasize this message, saying that now is the “perfect time” for the Fed to act.

While Mr Trump’s latest statements have helped ease immediate concerns about Mr Powell’s fate, his administration is still testing its ability to challenge the legal mechanisms that protect the Fed’s political independence.

The US Supreme Court is expected to consider a case involving the president's power to remove officials from independent agencies. The court's ruling could set a precedent that could affect the Fed as well.

For his part, Mr. Powell has so far steadfastly defended the independence of the agency he heads, arguing that it is a “legal matter.”

Hoang Bach