President Donald Trump wants to fire Federal Reserve Chairman Jerome Powell for raising interest rates, according to a report, an unprecedented action by a president against the independent body, that could undermine confidence in the U.S. financial system already under the strain of a vicious equity sell-off.
Trump has discussed firing Powell privately because of his frustration with stock market losses in recent months, according to Bloomberg News, which cited four people familiar with the situation. The president’s frustration intensified in recent days, with him discussing the firing “many times” during that time, according to the report.
The Dow Jones Industrial Average dropped 7 percent this week, its worst week in 10 years, on fears the Fed is unnecessarily slowing the economy as the central bank on Wednesday raised its benchmark interest rate for a fourth time this year. The Dow, which Trump cheered when it was at record highs earlier this year, is now down 9 percent in 2018.
The report said the Trump’s advisers have warned him against such a move, which has never been done by a president and it’s not even clear whether he has the legal authority to do so. White House and Fed spokespeople declined to comment to Bloomberg.
Powell became Fed chair in just February of this year after Trump nominated him to take over for Janet Yellen. He was easily confirmed in the Senate and has a four-year term.
While the president appoints the Fed’s board of governors, including the chairman, the central bank “derives its authority from the Congress, which created the System in 1913 with the enactment of the Federal Reserve Act,” according to the Fed’s website.
“The Board reports to and is directly accountable to the Congress but, unlike many other public agencies,