President Trump’s top economic adviser said Tuesday that the White House is not considering demoting Federal Reserve Chairman Jerome Powell, brushing off earlier reports that the president had looked into it.
“We are not taking any actions to change his status,” said National Economic Council Director Larry Kudlow about Powell, who President Trump appointed to chair the Fed in 2017.
Kudlow’s comments come after Bloomberg News reported that Trump had explored in February whether he could legally demote Powell from the Fed’s chairmanship.
Trump is barred by the Federal Reserve Act from firing Fed board members without “cause,” which is generally understood to be personal misconduct or gross negligence, not policy differences.
The law is less clear on whether Trump could demote the Fed chairman and render him a regular member of the Fed board of governors. If the demotion were legal, Trump could appoint a new Fed chairman without removing Powell from the central bank entirely.
Kudlow declined to confirm or deny the Bloomberg article, saying “It allegedly happened six months ago,” though the report said Trump considered the demotion four months ago in February.
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