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.
{mosads}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.
“It’s not happening today and therefore I have nothing to say about it,” Kudlow added.
A White House official echoed Kudlow in a statement to The Hill, saying, “We’re not going to comment on alleged conversations from 6 months ago that are not being pursued or considered.”
Kudlow also alluded to a March phone conversation between Trump and Powell, in which the president reportedly told the Fed chairman, “I guess I’m stuck with you,” according to The Wall Street Journal.
“I’m sure you can look it up on your machine,” Kudlow said. “I’ll just leave it there.”
Trump has bashed Powell and the Fed for close to a year, accusing the bank and its chairman of suppressing the economy by unnecessarily raising interest rates. The Fed has raised rates four times under Powell, a Republican.
Trump reportedly considered firing Powell in December as the stock market cratered into a bloody sell-off after the Fed’s final rate hike of the year. Powell has said that he cannot be fired by Trump and would not resign if asked to by the president, waving off concerns about political pressure.
The Bloomberg report comes as the Fed kicks off a highly anticipated monthly meeting where the bank faces a critical decision on whether to cut interest rates. The Fed is expected to announce Wednesday that it will keep rates steady for now, but may project at least one cut by the end of the year.