Will President Donald Trump soon fire Federal Reserve Chairman Jerome Powell, as is now hotly rumored? And do you care? If not, maybe you should. Because at this moment, the Fed chief seems to think he has to re-fight the inflation battle he lost three years ago. And his refusal to cut rates is starting to choke our economy.
Make no mistake: Having lost the confidence of the president who appointed him, Powell should resign. As a matter of practical stewardship of the nation’s central bank, Powell’s effectiveness as a financial leader has been called into question. Time to go.
But Powell’s defenders bizarrely argue that Fed chairmen can’t be fired. In fact, they can be fired “for cause,” which is vague enough to cover a whole host of sins, major and minor.
His backers also argue that Fed chiefs have independence, and that Trump letting him go would shatter that.
But that’s also not true.