U.S. President Donald Trump harshly criticized Federal Reserve (Fed) Chair Jerome Powell, whose term expires in May next year, and again raised the possibility of dismissal and plans to file a lawsuit.
Trump, speaking at a joint news conference after meeting Israeli Prime Minister Benjamin Netanyahu at the Mar-a-Lago resort in Florida on the 29th (local time), argued that the expense for renovating the Fed building was excessively set. Referring to Powell, he said, "He is simply incompetent," adding, "We will probably file a lawsuit against him."
Trump went on to say, "I want to dismiss him," adding, "I can still do that." The comment is seen as again revealing dissatisfaction that the Powell-led Fed did not move to cut the benchmark interest rate before September last year.
Trump also argued in August that the Fed building renovation expense was excessive and mentioned the possibility of filing a lawsuit against Powell. His remarks that day revived the issue he raised at the time.
In particular, with Trump set to announce a candidate for the next Fed chair soon, some view his renewed mention of a lawsuit and dismissal against Powell as a move to push Powell out before his term expires in May next year and to install a successor early who aligns with Trump's expectations for rate cuts.
Trump also signaled in July that if abuse of the chair's authority is revealed in the process of setting the Fed building renovation expense, it could constitute a "legitimate reason for dismissal."
Trump said that day he will announce the candidate for the next Fed chair next month. Those being mentioned as candidates include Kevin Hassett, Trump's close economic adviser and Chairperson of the White House National Economic Council (NEC); former Fed Governor Kevin Warsh; and Fed Governor Christopher Waller.