During an interview on Fox Business on 15/4, US President Donald Trump reiterated the criminal investigation into Federal Reserve (Fed) Chair Jerome Powell. Trump stated this investigation would prove Powell's "incompetence" and declared he "would fire" Powell if he did not relinquish both his positions at the Fed.
Powell's term as Fed Chair concludes in 5/2026. However, his term on the Fed's Board of Governors extends until 2028. The Board of Governors, the Fed's highest leadership body, comprises seven members responsible for establishing monetary policy, supervising banks, and ensuring national financial stability.
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US President Donald Trump and Fed Chair Jerome Powell in 2017. Photo: Reuters. |
Disagreements between Trump and Powell have persisted for many years, despite Trump himself having nominated Powell for the Fed Chair position. Trump expressed dissatisfaction with Powell because the Fed consistently raised interest rates and did not lower them at times the US President deemed appropriate to support economic growth. In January, the Fed Chair announced that federal prosecutors had initiated a criminal investigation into him, related to a renovation project at the agency's headquarters.
Trump's latest statement indicates that the situation at the Fed will become more complex. His threat of dismissal, coupled with the ongoing criminal investigation into Powell, could delay the confirmation process for Kevin Warsh, whom Trump has nominated as the next Fed Chair. Senator Thom Tillis has stated he will block Warsh's confirmation until the investigation involving Powell is resolved.
US Treasury Secretary Scott Bessent, however, expressed optimism that Warsh would be confirmed "on schedule." "He is a very good candidate. Republican senators on the Senate Finance Committee and Banking Committee are in agreement, and I am very optimistic," Bessent told reporters on 15/4.
The hearing for Kevin Warsh is scheduled for 21/4. Trump is confident that Warsh will lower interest rates after taking office.
Among the seven current members of the Board of Governors, three were nominated by former President Joe Biden. Powell was nominated by Trump but is not swayed by the US President's wishes. Even Christopher Waller, another member nominated by Trump, is considered unlikely to support Trump's demands regarding interest rates.
Typically, Fed Chairs usually leave the Board of Governors upon the conclusion of their leadership term. However, during a press conference last month, Powell stated he had "no intention of leaving the board until the investigation concludes transparently." He even suggested he might remain longer, "based on what I believe is best for the institution and the people we serve."
By Ha Thu (Reuters)
