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Opinion
Tim Duy

Trump Has Likely Done Lasting Damage to the Fed

The President is both setting in motion a crisis while undermining the institution that needs to respond to that crisis.

Will President Donald Trump try to fire Fed Chairman Jerome Powell?

Will President Donald Trump try to fire Fed Chairman Jerome Powell?

Photographer: Drew Angerer/Getty Images North America

President Donald Trump’s Christmas Eve tweet reiterated that he considers Federal Reserve Chairman Jerome Powell a thorn in his side, one I think Trump believes he needs to pull even if Treasury Secretary Steven Mnuchin claims otherwise. We need to start thinking about what happens if Trump tries to fire Powell. Short version: It would likely be an absolute mess.

The legal framework for firing a Fed chair remains subject to debate. Fed scholar Peter Conti-Brown argues that the President could try to demote Powell from Fed Chairman back to a governor, but that would potentially still leave Powell as Chairman of the interest-rate setting Federal Reserve Open Market Committee. How the Fed might react to such a situation is unclear.