President Donald Trump denied that he plans to fire Federal Reserve Chairman Jerome Powell following reports that indicated he was likely to, a development that moved markets.
If Trump did move to fire Powell, it would be a dramatic step and would launch a legal battle over control of the central bank that could roil global financial markets. But Trump on Wednesday downplayed the possibility during remarks in the Oval Office.
“He’s doing a lousy job, but no, I’m not talking about that,” Trump said in comments to the press after being asked about firing Powell. “Fortunately, we get to make a change in the next, what, eight months, and we’ll pick somebody that’s good.”
The remarks contradicted speculation Wednesday morning that such a move was imminent.
Tensions had risen on reports that Trump told Republican lawmakers visiting the White House on Tuesday evening that he was likely to fire Powell. Trump asked them whether they thought he should fire the Fed chairman, and they expressed approval, a White House senior official told the Washington Examiner.
The news of Trump’s remarks Wednesday morning led to an immediate drop in stocks and the dollar. However, stocks rose shortly after Trump said Powell’s dismissal was unlikely.
Trump said he hasn’t ruled out such a move but that it was “highly unlikely,” unless Powell had to leave because of any fraud related to renovations of the Fed’s Washington, D.C., headquarters.
In recent days, Trump officials have criticized Powell for cost overruns from the project, with some suggesting the ballooning costs give Trump cause to fire Powell.
Under the law, the Fed chairman can be fired only for cause.
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Powell has reiterated several times that he does not think Trump has the legal authority to remove him. Powell has also said he would not resign if Trump asked him to. Powell has been consistent in his view.
A firing would follow months of attacks against Powell and his leadership at the Fed from Trump and Trump administration officials, particularly over the Fed’s decision to hold interest rates high rather than cut them.
Naomi Lim contributed reporting.
