Republican senators caution Trump against firing Fed chair Jerome Powell

WASHINGTON AP Federal Reserve Chair Jerome Powell is gaining certain key backing on Capitol Hill from GOP senators who fear the repercussions if President Donald Trump follows through with threats to try and remove the politically independent central banker As Trump seemingly waffled back and forth this week on trying to dismiss the Fed chair various Republicans in Congress began to speak up and warn that such a move would be a mistake Trump would potentially obliterate the Fed s independence from political influence and inject uncertainty into the foundations of the U S financial system if he fires Powell If anybody thinks it would be a good idea for the Fed to become another agency in the establishment subject to the president they re making a huge mistake GOP North Carolina Sen Thom Tillis declared in a floor speech The measure of assistance from GOP members of the Senate Committee on Banking Housing and Urban Affairs proved how traditional Republicans are methodically navigating a presidency in which Trump often flirts with ideas like steep tariffs or firing the Fed chair that threaten to undermine confidence in the U S market Tillis who in the past few days decided not to seek reelection after clashing with Trump later explained The Associated Press that the economic fallout from Powell s firing would mostly hurt little guys like me that grew up in trailer parks that may have a meager thousand dollars in a k He also pointed out that the underlying complaint that Trump has with the Fed its reluctance to cut interest rates is not controlled by Powell alone but instead a -member committee The markets expect an independent central bank commented GOP South Dakota Sen Mike Rounds who cautioned against firing Powell And if they thought for a minute that he wasn t independent it would cast a spell over the forecasts and the integrity of the decisions being made by the bank Still plenty of other Republicans think that dismissing Powell is a fine idea The largest part incompetent worst Federal Reserve chairman in American history should resign noted GOP Ohio Sen Bernie Moreno Trump reported he was also encouraged to fire Powell during a meeting with about a dozen far-right House members Tuesday evening Do presidents have authority to fire the Fed chair House Speaker Mike Johnson R-La explained reporters that he was unhappy with the leadership at the Fed but added I m honestly not sure whether that executive authority exists to fire Powell House Financial Services Committee chair French Hill has underscored that presidents don t have the authority to fire the Fed chair yet has also been sympathetic to Trump s complaints about Powell s leadership He and other Republicans have also noted that Powell s term as chair is ending next year anyway and Trump will have an opportunity to name a new chair then When Congress started the Federal Reserve over years ago it insulated it from political pressure by stipulating that its governors and chair could only be fired for cause a higher bar than most of political appointees However the Trump administration has maneuvered to meet that standard by accusing Powell of mishandling a billion renovation project at the Fed s headquarters When his initial attempts to bully Powell failed Trump and Republicans in Congress suddenly decided to look into how much the Fed is spending on building renovations Sen Elizabeth Warren the top Democrat on the Senate Banking Committee commented in a speech Wednesday Independence does not mean impunity and I have long pushed for more transparency and accountability at the Fed But give me a break After Powell sent Congress a letter detailing parts of the renovation project Sen Tim Scott the Senate Banking Committee chair published a short comment saying Scott has continued to call for increased transparency and accountability at the Federal Reserve and this letter is consistent with improving the communication and transparency he is seeking Avoiding a protracted legal battle Regardless it would be legally dubious to fire Powell over the renovation That would be litigated and I don t see a reason for cause or otherwise to remove him Sen John Kennedy a Republican member of the Senate committee that oversees the Fed notified reporters this week He added that he understood the president s frustration with the Fed s reluctance to lower interest rates as it tries to tamp down inflation saying I get that but I think it s very pivotal the Federal Reserve remains independent Even those Republicans who argued that the president has grounds to fire Powell and piled criticism on the central banker conceded that it would still be a painful step That s a decision the president will make and he s being very deliberate about it declared Moreno the Ohio senator who called for Powell s resignation But I don t think we should put the country through any of that Source