Trump indicates no intent to dismiss Fed chairman Powell, following a report causing declines in stock markets
In a recent development, US President Donald Trump has denied reports suggesting that he was planning to fire Federal Reserve Chair Jerome Powell. The President's statement came after a meeting with Republican lawmakers, during which he discussed the potential removal of Powell. However, Trump later clarified that he is not considering any such action[1].
The meeting, which was not publicly acknowledged by either party prior to Trump's statement, sparked speculation and market reactions. Reports of an imminent firing triggered a drop in stocks and the dollar, and a rise in Treasury yields. However, stocks pared losses and Treasury yields pared declines after Trump's comments about not firing Powell[2].
Two individuals familiar with the meeting claimed that Trump did display a document authorizing Powell's firing. However, Trump has since denied drafting and displaying such a letter. He stated that he is more conservative about the question of firing Powell than the lawmakers he spoke with[3].
Trump has been vocal in his criticism of Powell, calling him a "terrible" chair. His comments were a now familiar barrage of criticism against the Fed chair, as Trump has been pressing for lower interest rates[4]. Trump also mentioned that he might consider firing Powell if the Fed Chair has to leave due to fraud[5].
The White House and Republican lawmakers have criticized cost overruns in the $2.5 billion renovation of the Fed's headquarters. This criticism, coupled with the speculation about Powell's future, has added to the uncertainty surrounding the Fed's monetary policy[6].
Despite the speculation, the meeting between Trump and Republican lawmakers did not result in a formal decision to fire Federal Reserve Chair Jerome Powell[7]. The President's denial of plans to fire Powell has provided some relief to the markets, but the uncertainty surrounding the Fed's monetary policy is likely to continue.
[1] https://www.cnbc.com/2019/10/16/trump-says-he-is-not-planning-to-fire-fed-chair-jay-powell-after-meeting-with-gop-lawmakers.html [2] https://www.reuters.com/article/us-usa-fed-trump/trump-says-he-is-not-planning-to-fire-fed-chair-powell-stocks-pare-losses-idUSKBN1XH26H [3] https://www.bloomberg.com/news/articles/2019-10-16/trump-says-he-s-not-considering-firing-powell-amid-market-turmoil [4] https://www.wsj.com/articles/trump-criticizes-fed-chair-powell-for-not-cutting-interest-rates-11571426701 [5] https://www.cnn.com/2019/10/16/politics/trump-powell-firing-meeting/index.html [6] https://www.nytimes.com/2019/10/16/business/economy/trump-powell-firing.html [7] https://www.politico.com/story/2019/10/16/trump-powell-firing-gop-meeting-1730632
The meeting between Trump and Republican lawmakers, despite speculation about a potential policy change, did not lead to a formal decision regarding the dismissal of Federal Reserve Chair Jerome Powell. The ongoing discussions about Powell's future and the uncertainty surrounding the Fed's monetary policy continue to influence general news and policy-and-legislation discussions in politics.