President Donald Trump pushed back on a story the Wall Street Journal published that said Treasury Secretary Scott Bessent made a case for not firing Federal Reserve chair Jerome Powell. On Truth Social Sunday, July 20, Trump said the WSJ ran a “typically untruthful story” and that “nobody had to explain” to him why firing Powell would be bad for the market.
“I know better than anybody what’s good for the Market, and what’s good for the U.S.A,” Trump wrote. “So, get your information CORRECT. People don’t explain to me, I explain to them!”
Trump has criticized Powell for not lowering interest rates, even calling him a “numbskull” at one point on social media. Recently, the president said the Federal Reserve should lower the rate from 4.5% to 1.5%.
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According to an article in the New York Times, Trump drafted a letter firing Powell, but when asked about the Federal Reserve Chair’s potential ousting, the president told reporters: “I don’t rule out anything, but I think it’s highly unlikely.”
The Federal Reserve is an independent government agency. Its chairman is picked for four-year term by the president and confirmed by the Senate. Legal experts who spoke to the New York Times said firing a Federal Reserve chair is tricky and hasn’t been done in modern United States history. Per the Federal Reserve Act of 1913, the chair can only be terminated for “cause.” Lev Menard, a legal scholar at Columbia University, said this means “there has to be a showing of misconduct.” If Trump were to fire Powell, he could go to a federal district court and sue, and the case could end up in the Supreme Court, the Times wrote.
Bessent, according to people familiar with the matter who talked to the WSJ, in recent days mentioned the political and legal obstacles firing Powell would have when talking to Trump. Other reasons Bessent floated for not ousting Powell included the effect on economy and markets and the idea that the Fed is going to cut rates later in 2025. Firing Powell would be unnecessary, Bessent reportedly said, because the markets have responded well to Trump’s policies.
Powell was first nominated by Trump during his first term, and then reappointed by Biden. His most recent term as chair started in 2022, and will end in May 2025, though his position on the Federal Reserve’s Board of Governors is in place until 2028.
Trump suing WSJ and its publisher
Trump lashed out earlier at the Wall Street Journal for a different article that detailed a letter the president allegedly sent convicted sex offender Epstein for a 2003 birthday album which had a drawing of a naked woman in it. He filed a lawsuit against the outlet, its publisher, Dow Jones; its parent company, News Corp; Rupert Murdoch, News Corp’s founder; News Corp CEO Robert Thomson and two reporters on Friday, July 19.
The lawsuit asked for damages awarded to be at least $10 billion. A Dow Jones spokesperson previously said in a statement to Straight Arrow News that it has “full confidence in the rigor and accuracy of our reporting, and will vigorously defend against any lawsuit.”
