Wednesday, Fed Chairman Powell says he would serve his full-term as head of the central bank even if President Donald Trump tries to demote him.
Mr. Powell told reporters at Wednesday’s press conference, “The law is clear that I have a 4-year term and I full intend to serve it.”
While Jim Cramer says, “Powell is living in a conventional world,” Mr. Cramer said, and then used a baseball analogy to explain. “The President is the Yankees and Powell is the Toledo Mud Hens.”
President Trump has been displeased with Mr. Powell after the Fed hiked rates 4X in Y 2018, saying the upward moves had stifled growth and the benefits of his tax cuts. The Fed raised rates in accordance with its dual mandate to keep prices stable and maximize employment, and yet the Fed did its best to bring on a recession, and hobble The Trump Economy.
Tuesday we reported that earlier this yea the White House lawyers examined the legality of stripping the Chairmanship from Mr. Powell and demoting him back to a Fed governor.
Last year in December we reported that President Trump discussed firing Mr. Powell amid mounting frustration over interest-rate increases last year.
Our President has repeatedly criticized Mr. Powell for not doing enough to boost the economy. Calling for lower interest rates as he seeks to offset the headwinds created by his trade war with China, and create a favorable backdrop for his 2020 re-election campaign .
President Trump told reporters last Friday that he disagreed with Mr. Powell “entirely,” adding that “if we had a different person in the Federal Reserve that would not have raised interest rates so much,” economic growth would have been stronger. He returned to the fray as the Fed meeting got under way Tuesday, calling out the ECB for weakening EUR by pledging policy stimulus.
In addition to Mr Powell, President Trump has picked 3 of the other 4 current members of the Fed Board in Washington. They all voted in favor of the Fed’s last interest-rate increase in December.
The President’s attacks on the Fed are a departure from decades of caution in the White House about making public comments on monetary policy, out of respect for the independence of the central bank. A quasi unit of government owned by Wall Street’s big banks.