Rumors began swirling last week that Trump has been discussing firing Federal Reserve Chairman Jerome Powell for interest rate hikes that have stymied economic growth, move of dubious legality that would undoubtedly cause even more uncertainty in the markets — but White House Press Secretary Sarah Sanders just attempted to put that rumor to rest with a rather terse message.
CNBC reported that Sanders spent the weekend tamping down the rumor as something that was highly unlikely to occur.
Sanders told CNBC: “I’m aware of no plans to fire Powell.”
Sanders shoots down rumor
Trump appointed Powell as chair of the Federal Reserve earlier in his term, but obviously is quite displeased with the many interest rate hikes that have put a brake on the rip-roaring market economy.
However, it is widely believed by experts that the president only has the legal authority to remove a member of the Fed “for cause” — such as committing a serious crime or proving they are unfit for office — not for enacting monetary policy the president disagrees with.
But Sanders was not alone in the effort to quell the media-perpetuated rumor that has destabilized the markets.
White House economic adviser Larry Kudlow also sought to downplay the suggestion that Trump was considering firing Powell.
Mnuchin speaks out against rumor
Treasury Secretary Steve Mnuchin also spoke out against the rumor, taking to Twitter to share what the president had told him with regard to Powell, the Federal Reserve, and the several interest rate hikes.
In a pair of tweets, Mnuchin wrote: “I have spoken with the President [Trump] and he said ‘I totally disagree with Fed policy. I think the increasing of interest rates and the shrinking of the Fed portfolio is an absolutely terrible thing to do at this time.”
Mnuchin added, per the president: “Especially in light of my major trade negotiations which are ongoing, but I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.’”
The Federal Reserve lowered interest rates to near zero following the 2008 recession and kept interest rates at that low level throughout the vast majority of former President Barack Obama’s two terms in office.
But the interest rate has been hiked several times since Trump entered office, each time serving as a stumbling block that slows the pace of economic growth by making it more expensive to borrow money or expand businesses.
President Trump would obviously like to see the Fed hold off on raising interest rates while he works to get America’s economy up and running strong again, but firing the Fed chairman — which likely would have no effect on the current monetary policy and only cause more turmoil in the markets — doesn’t appear to be a move he is considering, at least according to his top spokesperson.