Trump says he ‘maybe’ regrets picking Fed’s Powell
U.S. President Donald Trump stepped up his attacks on Federal Reserve Chairman Jerome Powell, saying he “maybe” regrets appointing him and demurring when asked under what circumstances he would fire the central bank chief.
Almost a year since nominating Powell to the post, Trump told the Wall Street Journal in an interview Tuesday that he was intentionally sending a direct message that he wanted lower interest rates, even as he acknowledged that the central bank is an independent entity.
Trump said in the interview that Powell “almost looks like he’s happy raising interest rates” and that it’s “too early to tell, but maybe” he regrets appointing him.
Trump sidestepped a question on what circumstances would lead him to remove Powell. “I don’t know,” the president said.
That contrasted with his response to a similar question on Oct. 11, when he answered, “I’m not going to fire him.”
Powell has so far brushed off the attacks, noting the Fed is independent and arguing by raising rates gradually it’s just seeking to normalize monetary policy in an “extraordinary” economy. He’s also suggested that the central bank needs to keep its eye on possible financial froth — the trigger for the last two recessions — as well as inflation for signs of overheating.
Asked on Wednesday about the president’s broadside against the central bank, Sen. Mike Crapo of Idaho declined to comment about whether he’s pleased with Powell. “I’m not going to get into that issue,” said Crapo, chairman of the Senate Banking Committee.
Investors so far don’t see the Fed bending to the pressure to slow the pace of hikes. If doubts were to emerge in markets about the central bank’s credibility, then investors could push up borrowing costs, ultimately slowing the economy and hurting stocks thus meaning Trump’s lobbying had backfired.
The president may be trying to cast the Fed as a scapegoat with just two weeks to go before elections that will determine whether Republicans maintain control of Congress.
Trump has little recourse if he wants to make any radical change. He can’t remove Fed governors, including Powell, except for illdefined “cause,” and the Senate must confirm replacements.
Trump has repeatedly criticized the Fed for rate increases, ratcheting up his rhetoric in recent weeks. Just this month, he called the central bank his “biggest threat” and blamed it for falling stocks.
He’s also slammed it as “out of control” and said it was “going loco.”
Trump’s criticisms mark a departure from the practices of his recent predecessors. Presidents for more than two decades mainly avoided public comments on Fed policy as a way of demonstrating respect for the institution’s independence in the hope that would ultimately mean lower rates and smoother economic expansions.
Federal Reserve Chairman Jerome Powell has been criticized for raising rates.