US President Donald Trump has told confidants that he believes he has the authority to replace Jerome Powell as chairman of the Federal Reserve Board, Bloomberg reported Wednesday, citing sources familiar with the matter.
According to Bloomberg, citing sources, Trump thinks he can demote Powell to be a board governor, however, he is not planning to do it at the moment.
Trump reportedly asked the White House to explore options of replacing Powell earlier this year, according to Bloomberg.
The news comes on the heels of Powell’s comments that he intends to serve his full four-year term despite Trump’s continuing criticism of the Federal Reserve’s policy.
Last week, Trump said that the Federal Reserve maintains high-interest rates that put the dollar at a disadvantage against the euro and other global currencies.
On 4 June, Federal Reserve Chairman Jerome Powell said in a speech that US central bank is monitoring the impact of global trade developments and is ready to take steps to alleviate any harm that ongoing tariff disputes might cause to the economy.
Powell did not directly reference interest rates, but his comments were widely interpreted to mean that the Federal Reserve could adjust its monetary policy if the trade wars dampen economic growth.
Earlier in the day, the Federal Reserve Federal Open Market Committee (FOMC) said in a statement on that it will maintain the US interest rate at the 2.25-2.5 percent range.
FOMC explained it continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near its symmetric 2 percent objective as the most likely outcomes, but noted that uncertainties about the outlook have increased.
In light of the uncertainties and muted inflation pressures, FOMC said it will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
The Federal Reserve’s decision comes after European Central Bank President Mario Draghi signaled on Tuesday a possible interest rate cut for the euro area.
Trump has accused Draghi of currency manipulation.
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