Trump expressed frustration over Federal Reserve Chair Powell's decisions on interest rates, describing them as insufficient. While Trump asked lawmakers if they supported Powell's firing, he publicly stated he was not planning to do so. The president suggested that any potential dismissal would need justification. Allegations were made about excessive Fed renovations costing $2.5 billion. Trump also initiated plans to identify potential successors to Powell, suggesting a strategy to influence monetary policy through new leadership while communicating alternative views regarding monetary policy.
Trump has expressed deep frustration that Powell has not yet cut interest rates. The Fed chair has taken a wait-and-see approach to monetary policy, citing uncertainty around the tariffs put in play by the Trump administration.
If he does seek to take the unprecedented step to fire Powell, Trump would test the legal bounds of his authority over the central bank and independent federal agencies.
In late June, Trump began what insiders have described as an operation to shadow Powell, identifying potential successors well ahead of any official transition.
The strategy involves selecting a new Fed chair early and using that individual to communicate alternative monetary policy views to the market, effectively undermining the current leadership at the central bank.
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