Yes, of course Trump could fire the Fed Chairman.
I’m not about to make a legal argument. Instead, like a five year old, I’m just going to point out what’s blatantly obvious and doesn’t require Constitutional scholars toiling late into the night, poring over old parchments by candlelight…
Donald Trump controls the Senate and the Supreme Court and doesn’t care at all about historical precedent, tradition or societal norms. He has shown a willingness to act out on whatever impulse comes to him whenever he feels like it. And more importantly, the Senate Majority Leader loves it all, and his wife works for the Trump administration, and his own popularity is under siege in his home state of Kentucky, which is a Trump state through and through. This isn’t a political rant, I’m just stating what you already know. You can agree with it and still support the President, I’m not writing to change anyone’s mind.
So here’s how it will play out. Powell comes through with an interest rate cut in July and the White House says, “it should have been done a long time ago. You see! We were right.”
Or…no cut in July, and the President demotes him and chooses another of the current Federal Reserve Governors to become the Chairman.
What happens next is obvious. Two avenues we could go down.
Avenue one: Powell steps down quietly and goes back to being a private equity industry multimillionaire, drying his tears with hundred dollar bills and speaking engagement checks.
Avenue two: Powell and the Federal Open Market Committee (FOMC), which