Jerome Powell would dig in for a legal battle should President-elect Donald Trump try to force him out as Federal Reserve chair, The Wall Street Journal reported Monday.
However, Powell might have to pay for such a battle himself, according to the report.
Powell said Thursday he would not resign if asked to by Trump. "No," Powell said, answering "no" a second time when asked if he would be legally required to leave. Later, Powell said firing or demoting the fed chief is "not permitted under the law."
Given the Fed is an independent and politically agnostic agency, Powell would settle in for a fight to preserve that autonomy, the Journal reported.
"If the president were to succeed at this, that would mean every future chair is subject to removal at the whim of the president," Scott Alvarez, former Fed general counsel from 2004 to 2017, told the Journal. "I don't think that's a precedent Jay would want to set, and that's why I think he would fight it. This is a humongous precedent."
Trump has signaled that he would allow Powell to finish out his term, which ends in 2026, but has said straight out that he would not reappoint Powell to a new term. Trump appointed Powell in 2018 but repeatedly criticized him for not lowering rates fast enough throughout his 2016-2020 term.
"I would not reappoint him. I thought he was always late, whether it was good or bad, but he was always late," Trump said in August.
At issue for Trump will likely be if he agrees with Powell's market decisions to fulfill one of his top campaign promises: Bring down inflation, according to the Journal. Experts say that Trump's attempt to remove Powell while the Fed continues to battle inflation would be disruptive and exacerbate the issue, according to the report.
"If that interacts with uncertainty over who is going to run the Fed, you could get something very problematic," Michael Feroli, chief U.S. economist at JPMorgan Chase, told the Journal.
For his part, Powell is prepared to fight back in 2025 just as he was in 2019 if Trump moved to fire or demote him, even if that means paying for legal representation himself; the Journal reported it's unclear if the Fed itself would have standing to challenge Powell's removal.
"I feel accountable and responsible for the institution," Powell said in March.
Mark Swanson ✉
Mark Swanson, a Newsmax writer and editor, has nearly three decades of experience covering news, culture and politics.
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