One of the many persons experiencing their president’s obsessive dislike is the President of the Federal Bank (FED). He has been attacking the head of the US Central Bank for months on social media and in statements to journalists, calling him with characterizations like “stupid”. The highlight of this was when last Thursday, the two met in front of the cameras and clashed over the cost of renovations of buildings.
The US media commented that Powell’s stoic, amazed and “tired” style in their confrontation is indicative of a reality: that President Donald Trump is not really in conflict with Jerome Powell – the conflicts have two sides. In this case, Trump and his allies launch one attack after another on Powell, threatening him with dismissal to criminal prosecution, while he simply accepts the situation.
Who is Jerome Powell?
Gerom Powell, because of his position, has always remained restrained when he speaks publicly, choosing every word carefully, knowing that even traces of optimism or pessimism can cause frenzy in financial markets. But his rhetoric of restraint should not be perceived as a lack of courage or boldness, as evidenced by his recent association with Donald Trump, where unlike many (even world leaders), he had no hesitation to oppose his words.
His communication abilities are one of Powell’s powerful, distinctive features in the Fed. Unlike his three direct predecessors, he does not hold a doctorate in finances, but is a lawyer, with a deep understanding of financial and agreement. He speaks more in simple terms and has tried to make the Fed more transparent to ordinary Americans.
In a series entitled “Fed Listens”, which started in 2019, he and his colleagues travel all over the country where they talk to citizens – owners of small businesses, unions, retirees and so on – to hear their views on the economy. This is his attempt to make the Fed more visible at a time when trust in institutions is low.
He is also a regular visitor to the Capitol, where he often meets legislators from both parties to discuss the economy and monetary policy.
He began his presidency embarrassed. Normally Janet Gellen’s predecessor would serve another four years at the Fed wheel, but in 2017, during his first term, Trump decided he was not appropriate – so he appointed Powell.
Soon, however, Trump turned against him. When Powell continued from where Gellen had stopped, raising interest rates, the US president expressed dissatisfaction and then contempt. “My only question is, who is our biggest enemy, Jay Powell or President Si?” He had written on Twitter in 2019. His answer was that the Fed was independent and did not take politics in its decisions.
In 2021, former President Joe Biden renewed Powell’s term. But it was certain that, since Trump regained the White House, the head of the Fed would be called upon to face a new wave of attacks. The Washington Post explains that none of the attacks on Jerome Powell “makes no sense. Trump intimidates the Fed president incessantly, while his arguments do not stand. “
Can Trump really dismiss him?
. However, whether the US president has the jurisdiction to do so is controversial. Initially, unlike other government agencies, the Fed has great independence from Congress and the White House, as economists said, monetary policy decisions should not be affected by political pressure. To ensure the accountability of the Fed, the president shall deposit before Congress, as well as other government agencies.
By law, the head of the Fed could be dismissed by the president only if there is a reason for “for reason by the president”. Of course, the “cause” is not clearly certain, nor are there defined procedures for removing it, while there is no previous one – no president has ever removed a member of the Fed Board of Directors and the law has never been tested in court.
However, the “cause” is widely interpreted as “ineffectiveness, negligence or poor operation”, according to a Supreme Court ruling on the Federal Committee of Commerce. Trump, therefore, may have to prove that there is one of the above for Powell’s successful dismissal – and then be able to rely if the head of the Central Bank decides to file a lawsuit for his dismissal.
“Under normal circumstances, I would say that Powell would win in any case,” said Columbia University Professor Lev Menad in the New York Times. “But we do not live under normal circumstances, because the court has shown that it is willing to interpret the President’s power under the Constitution in such a broad sense that it allows the president to violate laws.”
