Key Insights:
President-elect Donald Trump has refused to replace Jerome Powell as Fed Chair.
Trump said he could replace him, but he chose not to.
Legally, he would need a senate vote to remove him only on grounds of misconduct.
Jerome Powell also dismissed rumors of him stepping down, citing the apolitical nature of the Federal Reserve.
Earlier, Trump said he would take control of the US Fed and back the US Dollar with Bitcoin.
Donald Trump has dismissed speculations on the removal of US Federal Reserve chairman Jerome Powell after his historic win in the 2024 US Presidential Elections.
In an interview with the NBC, Trump responded to a question on a new Fed chair, saying “Fire him? No, I don’t see it.”
He added that Jerome would step down if Trump asked him to but would not do so if he asked him. Donald Trump nominated Powell as the US Federal Reserve Chairman in 2018.
Speaking on the matter (before the elections), US Fed Chairman Jerome Powell said that if Trump won, he would not resign and there is no legal rule that he is required to leave after elections.
Donald Trump was indeed the President who nominated Jerome Powell as the Fed Chairman. When Powell was sworn into office in 2018, the Senate voted 80 in favor and 19 against to confirm his appointment. As per his term, Powell will serve until 2026 as Fed Chairman and could remain one of the governors of the Federal Reserve boards until 2028 (a 14-year term).
Unlike other offices like the US Treasury, the SEC, or other institutions within the White House's reach, the US Federal Reserve is an independent body composed of 12 other Federal Reserve boards. The institution is generally considered apolitical, but few critics disagree.
For crypto markets, the Fed's two rate cuts of 0.5% and 0.25% have been highly supportive, injecting much-needed liquidity into the markets.
To remove a US Federal Reserve chairman, the President needs to show probable cause, such as misconduct (corruption, abuse of power, financial interest), and a Senate vote. It is the Senate that qualifies the Fed Chairman after being nominated by the US president.
Powell has been the US Fed chairman twice. The first term was from 2018 to 2022, and the second term, which began in 2022 and ends in 2026, has been ongoing.
However, Trump has had previous differences with Powell. Once, he reportedly said to him, "Looks like I am stuck with you," over the phone from the Oval Office.
Trump had earlier said that he would take control of the US Federal Reserve, though he didn't make it clear as to how we would do that.
In another instance, he sarcastically called the Fed Chairman's job the best in the US because he needed to visit it once a month.
“You show up to the office once a month, and you say, ‘Let’s see, flip a coin.’”
Donald Trump
Among Donald Trump's main election promises, backing Bitcoin remained the largest pro-crypto step that Trump could take. Since the Federal Reserve Board controls the world's supply of US Dollars, Trump needs Powell and a pro-crypto US Treasury Secretary on his side to do it.
It is to be noted that the Department of US Tresury is within the US Government and its secretary is appointed by the US President.
Yes, Trump can remove the US Federal Reserve Chairman from his office.
As a president, Trump has a very small leverage over the US Fed which has been an apolitical office since the last century. This means that Trump can only remove Jerome Powell on the latter's misconduct (civil or criminal) and not just because they differ in policy.
However, if push comes to shove, the Republicans (Trump's party) have a majority in both the Senate and the House of Representatives, he could legally remove Powell, but only through an arduous process nonetheless.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.