WASHINGTON: US President Donald Trump has intensified his criticism of Federal Reserve Chair Jerome Powell, this time targeting a $2.5 billion renovation project at the Fed’s headquarters. Trump hinted at possible “fraud” as grounds for Powell’s removal, marking a new front in his long-running feud with the central bank chief.
Legal experts say removing Powell would require clear evidence of wrongdoing. Columbia Law School professor Lev Menand noted that while statutes allow dismissal for “neglect of duty” or “malfeasance,“ no such proof has been presented. “Based on publicly available information, there’s just no grounds for removing Powell ‘for cause’,“ Menand told AFP.
Trump’s latest accusations follow months of frustration over the Fed’s decision to keep interest rates steady despite his calls for cuts. He argues lower rates could reduce national debt costs, pointing to subdued inflation. However, the Fed’s rate-setting committee includes multiple voting members, meaning Powell’s potential ouster may not guarantee policy shifts.
Market analysts warn of volatility if Powell is forced out. ING’s Padhraic Garvey said stocks could initially drop before rebounding on expectations of aggressive rate cuts. The dollar might also weaken, though Fed credibility remains intact for now.
Powell has defended the renovation, stating no luxury amenities were included and that structural repairs were necessary. He has also requested an independent review of the project in response to White House concerns. - AFP
