Trump Has Draft of Letter to Fire Fed Chair. He Asked Republicans if He Should Send It.

A previously undisclosed detail from the Trump administration has emerged: former President Donald Trump reportedly drafted a letter to dismiss Federal Reserve Chair Jerome Powell and subsequently sought counsel from Republican lawmakers regarding the potential action.

The revelation highlights the intense friction that characterized the relationship between President Trump and the nation’s central bank during his term. Trump frequently and publicly criticized Powell and the Federal Reserve’s monetary policy decisions, particularly the series of interest rate hikes initiated by the Fed. He argued these rate increases were detrimental to the U.S. economy and undermined his administration’s efforts to foster growth.

According to reports, the draft letter signals a concrete step taken by Trump towards what would have been an unprecedented intervention in the Federal Reserve’s independence. While presidents appoint the Federal Reserve Chair, the ability to remove them before their term concludes is a subject of significant legal debate and has never been tested.

Sources familiar with the matter indicate that after the draft was prepared, Trump consulted various Republican figures, seeking their opinions on whether he should proceed with sending the letter. The nature of the advice he received and the specific individuals consulted have not been fully detailed, but the discussions reportedly underscored the potential political and economic ramifications of such a move.

Ultimately, Jerome Powell was not dismissed, and he continued to serve as Federal Reserve Chair through the remainder of Trump’s presidency, and was later re-nominated by President Biden. The existence of the draft letter, however, underscores the depth of Trump’s frustration with the Fed’s policies and his willingness to explore extreme measures to exert influence over an institution traditionally viewed as independent from political pressure.

The Federal Reserve’s independence is considered crucial for maintaining economic stability, allowing the central bank to make policy decisions based on economic data rather than political expediency. The reported existence of the draft letter and the consultations with lawmakers reignites debate over the boundaries of presidential power concerning independent agencies.

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