#PowellVsTrump
The tension between Donald Trump and Jerome Powell is heating up. Trump has been criticizing Powell, the Federal Reserve Chair, for not lowering interest rates and has even floated the idea of firing him. Let's break down what's happening :
*Why is Trump criticizing Powell?*
Trump's main beef with Powell is that he hasn't been lowering interest rates as much as Trump would like. Trump believes lower interest rates would boost the economy.
Trump has also been criticizing Powell over the Fed's $2.5 billion renovation project, calling it "ostentatious" and suggesting that Powell should be investigated for fraud.
*Can Trump actually fire Powell?*
The Federal Reserve Act allows the president to remove a member of the Fed's Board of Governors "for cause," which includes inefficiency, misconduct, or dereliction of duty.
However, the legal standing around removing the chair specifically is less clear. Some experts believe that the Fed's unique quasi-private structure might shield it from presidential interference.
*What would happen if Trump fired Powell?*
If Trump were to fire Powell, it would likely trigger a landmark lawsuit that would ultimately be decided by the US Supreme Court.
Powell could sue and ask for an injunction reinstating him while the litigation moves forward.
The outcome would depend on whether Powell can convince the court that his firing was unjustified.
*Market Impact*
The possibility of Powell's dismissal has already caused market jitters, with the US Dollar Index falling by as much as 0.8% and investors warning of potential market instability.
Some experts believe that Trump's actions could lead to slower economic growth, higher unemployment, and sticky inflation.
