US President Donald Trump on Wednesday denied reports he intends to fire Federal Reserve Chairman Jerome Powell as the White House escalates its attacks on the central bank.
After US media reported the President indicated he was open to dismissing the Fed chairman, Mr Trump confirmed he had met Republicans from the House of Representatives during a closed-door meeting on Tuesday.
“I talked about the concept of firing him. I said, 'what do you think?' Almost every one of them said I should, but I'm more conservative,” he said before a meeting with Bahrain’s Crown Prince Salman bin Hamad Al Khalifa.
When asked if he would rule out the idea, Mr Trump said: “I don't rule out anything but I think it's highly unlikely unless he has to leave for fraud.”
Republicans on the House Financial Services Committee were expected to meet Mr Powell on Wednesday night, Semafor reported.
Mr Trump has launched an unrelenting campaign to pressure Mr Powell to lower interest rates, which the President wants to help service the nation's debt in a concept known as “fiscal dominance”. On Wednesday, he again said the Fed's current target rate of 4.25 per cent to 4.50 per cent should be three points lower.
Under the Federal Reserve Act, a president can remove a Federal Reserve official only “for cause”. This means the White House must show a Fed official or its chairperson had committed an act of malfeasance or neglect of duty. A recent Supreme Court ruling upheld the notion that legal reasoning the White House has been used to fire officials at other independent federal agencies does not apply to the Fed.
But the White House in recent weeks has launched a new phase of attack on the Federal Reserve, accusing Mr Powell of mismanaging the central bank given the ballooning renovation costs of its headquarters.
Asked if Mr Powell should be investigated, Mr Trump said: “Well, I think he's already under investigation. He spent far more money than he was supposed to rebuilding.”
Some Trump officials, including National Economic Council director Kevin Hassett, said Mr Powell could be fired over the renovation project. When asked on Tuesday if the renovation issue was a sackable offence, Mr Trump said: “I think it sort of is.”
Mr Powell, whose term as Fed chairman expires next May, has asked the Fed's inspector general to review the renovation project.
The Fed chairman has remained adamant that the President has no authority to fire him. In November, Mr Powell said such a move is “not permitted under the law”.
Mr Trump's pressure campaign comes as the central bank has extended its pause on interest rates as it braces for tariff-related inflation. A Labour Department report on Tuesday showed inflation accelerate in line with expectations last month. Underlying numbers in the report showed rising prices in goods such as household appliances and clothing are showing that tariffs are being passed on to consumers.
Most Fed officials suggest they are still waiting further clarity before cutting interest rates, meaning they are likely to continue their rate-cut pause when they meet later this month.
