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Trump ‘Won’t Fire’ Jerome Powell, But He Does Know A Guy Who Would Make A Great Fed Chair…

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9 comments on “Trump ‘Won’t Fire’ Jerome Powell, But He Does Know A Guy Who Would Make A Great Fed Chair…

  1. Trump also doesn’t seem to understand, although he claimed to know more than the Fed, that the Treasury doesn’t borrow money at the Fed interest rates, but at the rates bid for its notes at the Treasury auctions. There is definitely a correlation, but not the one that Trump stated. But there again, he still believes that tariffs are paid by the exporting company as opposed to being an extra tax.

    • Oh yes, and he also doesn’t have the power to just fire Powell.

      • From Section 10 of the Federal Reserve Act:

        “…Upon the expiration of the term of any appointive member of the Federal Reserve Board in office on the date of enactment of the Banking Act of 1935, the President shall fix the term of the successor to such member at not to exceed fourteen years, as designated by the President at the time of nomination, but in such manner as to provide for the expiration of the term of not more than one member in any two-year period, and thereafter each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President.”

        Nowhere in the article does it state what exactly cause is determined as, thus the biggest hurdle that would prevent Trump from firing Powell would be the historical precedent; something the current president has had no qualms with breaching in past actions.

  2. Harvey Darrow Cotton

    I wonder if the markets would greet Trump’s firing of Powell with the same thunderous applause they had for Erdogan’s and Bolsonaro’s victories.

    Also, who, exactly, is going to stop Trump from firing Powell? This Congress? This Supreme Court? This financial media? The demos? We live in a banana republic. We just have a lot of 🍌.

  3. Never underestimate the power of human stupidity.
    62,979,879 (46.1%) of them to be exact.

  4. You’ve mentioned Yellen’s “lower for longer” commitment in the context of the current hiking cycle in several of your articles, but my understanding of what she’s pushing for has nothing to do with the current pace of tightening.

    A “lower for longer” commitment would be a unconventional policy tool that could be used instead of (or to reduce the needed size of) Quantitative Easing. The commitment wound be to allow inflation to modestly overshoot target after a recession, with the goal of reducing expected real interest rates.

    The commitment would come when the economy is depressed; not now. Even if the Fed endorsed this policy today, it wouldn’t change anything in the current hiking cycle.

  5. Stephen Andrew

    A la Erdogan: there’s really only the US Senate between Trump and the appointment of his son-in-law – J. Kushner himself – from Fed Chair…. Feeling secure?


    So much power has been ceded to the POTUS over the last five decades, and more by the day, that I don’t see any way out of it.

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