President Donald Trump recently held a closed-door meeting with the U.S. Treasury to discuss the possibility of firing Federal Reserve Chairman Jerome Powell. Below are some key pieces of information related to this event:
• Reason for dismissal: Trump is said to be dissatisfied with the Fed's monetary policy, particularly the decision to maintain interest rates and the costs of renovating the Fed headquarters.
• Market reaction: News about the possibility of firing Powell has shaken the financial markets, raising concerns about the independence of the Fed and its political implications.
• Advice from the Secretary of the Treasury: U.S. Treasury Secretary Scott Bessent advised Trump not to fire Powell, as this could disrupt the market and affect politics. Bessent also emphasized that Powell's term is set to end in May 2026, and firing him at this time is unnecessary.
• Future plans: Trump has the authority to appoint two key positions at the Fed in early 2026, including Council member Adriana Kugler and Powell. This could be an opportunity for Trump to shape the Fed's direction in the long term.
• Trump's reaction: Trump denied that he is seeking to remove Powell, saying, "No, we are not planning to do anything." However, he also left open the possibility of firing Powell if there is just cause.
Some opinions from experts:
• Derek Tang: Firing Powell could disrupt the financial markets and lead to a legal confrontation over the independence of the central bank.
• Thomas Thornton: The independence of the Fed is extremely important, and breaking it could pose risks to the bond market.
• David Solomon: The independence of the Fed, especially regarding monetary policy, is extremely important.
• Brian Moynihan: An independent Fed is very important for the country.