This much is clear: President Trump is unhappy with Federal Reserve chief Jerome Powell. Whether he can do anything about it, however, is another question entirely. A slew of reports, including in the Wall Street Journal, say Trump has been asking about whether he has the authority to fire the Fed chief, but nobody seems clear about the answer. "Legally ambiguous" is the phrase used by Bloomberg. That's mainly because no president has ever tried. The background of what's going on:
- The anger: Powell's Fed raised interest rates again last week, a move that Trump is worried will keep the stock market in a funk. After the Fed move, Bloomberg reported that Trump talked with his advisers about firing Powell "many times" in the subsequent days.
- Hoover worries: The New York Times similarly reports that Trump asked advisers whether he could fire Powell and expressed his worry that Powell would "turn me into Hoover," a reference to the Depression-era president. Trump also called his decision to appoint Powell the worst of his presidency.
- The rules: The Federal Reserve Act says Fed governors (and Powell is one) may be "removed for cause by the President." But legal scholars quoted by Bloomberg and the Times suggest that a disagreement over policy doesn't qualify. Presidents have traditionally respected the Fed's independence and not commented on policy decisions.
- Trump's analogy: The president continued his criticism of the Fed on Twitter Monday, writing that it was "the only problem our economy has." The Fed has no "feel for the Market" and lacks a basic understanding of issues such as trade wars, said Trump. Which led to his closing line: "The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!"