Washington: US President Donald Trump has threatened to fire Federal Reserve Chair Jerome Powell if he does not step aside at the end of his term in May. The two have been embroiled in a bitter spat over Powell's reluctance to cut the central bank's interest rate, despite Trump's repeated calls.
According to Ghana Web, Powell's term expires on 15 May, but he is planning to remain in post until his successor, Kevin Warsh, is confirmed by the Senate. Trump, in an interview with Fox Business, expressed his frustration, stating, "Then I'll have to fire him," highlighting his desire for Powell to vacate the position.
Thom Tillis, an influential Republican senator on the committee overseeing nominations for the Federal Reserve chair, has threatened to block Warsh's confirmation. Tillis is demanding that a criminal investigation into Powell, related to the renovation of the Federal Reserve building, be dropped before allowing the appointment to proceed. If Warsh is not confirmed before Powell's term expires, Powell plans to stay on temporarily.
Trump has been critical of Powell's handling of the Federal Reserve renovation, accusing him of overspending on the project. He has also expressed dissatisfaction with Powell's performance, calling him a "knucklehead" and alleging that Powell has ignored his calls for interest rate cuts.
Amidst this controversy, stock markets and the US dollar slipped as news emerged that Trump had considered firing Powell. Although Trump later denied any immediate plans to remove Powell, he acknowledged the severity of such an action, which would break precedent, as no Federal Reserve chair has ever been fired.
Trump initially appointed Powell to lead the Federal Reserve during his first term in 2017, praising his leadership and expertise. Powell was reappointed by President Joe Biden in 2021.