Trump thinks of a "catastrophic step"[/size] Twilight News
3 hours ago
US President Donald Trump is considering dismissing Federal Reserve Chairman Jerome Baal because he is unhappy with the bank rate hike last week, informed sources said.
Some close to Trump warned that isolating Powell would be a disastrous step, or any attempt to force Jerome Powell to step down from the Fed, would have a devastating impact on capital markets and undermine investor confidence in the central bank's ability to manage the economy without political interference.
This comes at a time when financial markets are witnessing a sharp decline, while most major indices have declined significantly since the beginning of the year.
The US president has no right to dismiss the central bank governor without giving positive reasons, according to the Federal Reserve Act.
Since the chairman of the Central Reserve Board also acts as a bank governor, it appears that the law also covers it, but the rules on dismissing the Fed chairman seem more ambiguous.
Observers say such a move by Trump would strike an unprecedented blow to the independence of the central bank and that although Jerome was appointed by the president, he is concerned that Trump ignored the importance of preserving the bank's independence.
According to a close associate of the US president, Trump's frustration over the actions of Jerome Powell has escalated over the past few days in light of the latter's decision to raise interest rates, which Trump sees as slowing down economic growth.
White House spokesmen declined to comment, and Federal Reserve spokeswoman Michele Smith also declined to comment on the reports.