Treasury Secretary Scott Bessent privately urged President Donald Trump over the last week not to fire Federal Reserve Chairman Jerome Powell, according to a report.
A Wall Street Journal report on Saturday detailed Bessent’s concerns in talks with the president over a possible ousting of the Fed chairman, a move that Trump was reportedly considering this week until he later signaled it was unlikely he would do so.
Those concerns voiced to Trump by Bessent were the negative effects a removal would have on the economy and markets, the possibility that the Fed moves to cut interest rates later in the year, and the likely legal backlash the move, which has never been done by a sitting president, would face, the report said, citing people familiar with the discussions.
Trump has repeatedly bashed Powell both in posts on Truth Social and in remarks to reporters throughout the year due to his frustration with the Fed opting to hold rates steady at all their meetings so far this year.
In his most recent criticism of Powell, Trump called him one of his “worst appointments” in a Friday Truth Social post that also claimed the Fed chairman was “choking out the housing market with their high rate.”
“The Fed Board has done nothing to stop this ‘numbskull’ from hurting so many people. In many ways the Board is equally to blame!” the president posted.
Despite the constant attacks, Powell has remained quiet about the possibility he is removed from his position atop the Fed, while also maintaining that such a move by the president would not be legal.
That assessment is backed up by the Federal Reserve Act of 1913, which states that a Fed chairman can only be removed for “cause.”
A possible “cause” for removal could be coming, however.
AN ATTEMPT BY TRUMP TO FIRE POWELL WOULD FACE MAJOR LEGAL CHALLENGE
Just last week, Office of Management and Budget Director Russ Vought accused Powell of “grossly” mismanaging the Fed after renovation costs for two of its buildings in Washington, D.C., have hit $2.5 billion, roughly $700 million over their initial cost. Vought later suggested White House officials were looking to investigate the overruns.
Powell recently defended the renovation costs, while also adding that he has asked for a “fresh review” of the project from the central bank’s independent inspector general.
