Donald Trump has threatened to fire Jerome Powell as chair of the US Federal Reserve if he remains in the role beyond the official end of his term in May. The US president made the comments during an interview with Fox Business, saying he had 'held back' on dismissing Powell but would be forced to act if the Fed chief refused to leave on time.
Trump has repeatedly criticised Powell for keeping interest rates too high, arguing that the central bank should be lowering borrowing costs. The president announced former Fed governor Kevin Warsh as his nominee to replace Powell in January, but Warsh's confirmation in the Senate is far from certain.
Republican senator Thom Tillis, a member of the banking committee, has said he will block Warsh's nomination until the Department of Justice ends its criminal investigation into Powell over renovations at the Fed's headquarters in Washington DC. Tillis called the probe 'reaching the point of absurd', but Trump has defended the investigation, alleging without evidence that the building project may involve corruption or incompetence.
Even if Trump attempts to fire Powell, it is unclear whether the Supreme Court will allow it. The court has yet to rule on Trump's firing of Fed governor Lisa Cook last summer, with justices appearing sceptical during oral arguments in January about the president's power to dismiss Fed board members without cause.
Powell has previously rebuked Trump, calling the investigation a 'pretext' linked to the Fed's refusal to bow to political pressure on interest rates. He warned that the real issue is whether monetary policy can remain independent of political intimidation.
