The conservative Wall Street Journal editorial board expressed horror that President Donald Trump moved to reopen his "vendetta" against Federal Reserve Chair Jerome Powell, threatening once again to fire him early, despite not having any clear statutory authority to do so.
"Mr. Trump is frustrated that his Administration’s criminal investigation into Mr. Powell over a cost overrun on a Fed building renovation is backfiring in a big way. Perhaps that’s what prompted his outburst in a Fox Business interview on Wednesday in which he doubled-down on his earlier threats to sack Mr. Powell," wrote the board. "If Mr. Powell doesn’t leave when his term as Chair ends on May 15, 'I’ll have to fire him,' the President said, adding 'I’ve wanted to fire him, but I hate to be controversial.'"
Powell has made clear he will remain as a governor after he steps down as chair; his term as the former lasts until 2028 — calling Trump's bluff.
"This would inevitably set up a legal clash a la his attempt last year to remove Fed governor Lisa Cook, a Joe Biden appointee," noted the board, adding that the Supreme Court appears likely to block Cook's removal. "Mr. Trump might claim that the building cost overruns give him 'cause' under the Federal Reserve statute to fire Mr. Powell. He seemed to tee up that argument on Wednesday by saying the overruns demonstrate 'incompetence.'"
This isn't going to fly in court, wrote the board, not least because Powell wasn't actually in charge of the renovation at issue — and besides, they noted, "Mr. Trump’s new East Wing ballroom is exceeding its initial projections. Is that a sign of Presidential incompetence?"
All of this additionally sets up a firestorm as Trump tries to nominate Kevin Warsh as Powell's replacement, as Sen. Thom Tillis (R-NC) has threatened to block all Fed nominees until the administration stops criminally threatening the agency.
"The President is angry that Mr. Powell hasn’t cut interest rates more. But Mr. Powell alone doesn’t set rates, so firing him won’t necessarily get the President what he wants," wrote the board. "The best way to replace Mr. Powell is to drop the pretextual Justice investigation and get Mr. Warsh confirmed. Why is this so hard for the President to understand?"