A Politically Captive Fed Would Be a Weak Fed

The Trump administration, Congress and the Federal Reserve are mired in a beltway clash over renovations to the central bank’s Washington headquarters. To an outside observer, this may appear to just be a fight over the cost of marble, but it could be something deeper.

Reports have surmised that the White House may be building a case to fire Fed Chair Jerome Powell for cause and replace him with someone more willing to follow the administration’s preferences in setting interest rates. President Donald Trump is likely to terminate Powell “soon,” and discussed the possible move in a meeting with congressional Republicans on Tuesday night, Bloomberg News reported, citing a White House official who requested anonymity to discuss a private conversation. Trump has not made a final decision and could change his mind, according to Bloomberg News. (Trump later told reporters he is “not planning on doing anything” to remove Powell.)