The Federal Reserve's response, or lack thereof, to President Donald Trump's recent threat has left the administration reeling.
Trump has made it clear he wishes to oust Jerome Powell from his post as chair of the Federal Reserve, but may have accidentally prolonged his term. Powell is set to conclude his time as chair on May 17, but an investigation into Powell launched by the Trump admin may see him sit in his post for longer than anticipated.
Analysis from Andrew Egger notes the trouble that Trump has on his hands, with The Bulwark columnist highlighting the steps Trump must now take. Egger wrote, "Last month, a federal judge agreed, invalidating a pair of subpoenas sent by U.S. Attorney Jeanine Pirro’s office to the Federal Reserve.
"There was 'abundant evidence,' Judge James Boasberg wrote, that the 'dominant (if not sole) purpose' of the subpoenas was 'to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will.'
"Their legal legs cut from under them, Trump and Pirro have been resorting to sillier, more thuggish tactics: Prosecutors from Pirro’s office made an unannounced visit to the Fed building yesterday, seeking to 'check on progress' via a 'tour' of the renovations."
While Trump may have been hoping the Federal Reserve would give in to his demands, it appears to have had the opposite effect on the agency.
"The Fed, having declined to buckle under more dangerous pressures, practically laughed this one off," Egger wrote. "Trump, then, is stuck.
"His investigation was supposed to give him the means either of bending Powell to his will or of getting the irritating Fed chair out of his hair. Instead, it has been completely thwarted—first by Powell’s courage, then by the courts.
"But the ongoing existence even of such a feeble and impotent investigation is enough to keep Sen. Tillis from giving his permission for the Senate to confirm Kevin Warsh. Far from accelerating Powell’s departure, then, the investigation now seems likely to prolong his stay."
Not only is there a way for Trump to get what he wants, but Egger argues that the president is too stubborn to take action, as it would mean he could not save face amid a sweeping change to the Federal Reserve.
Egger added, "Trump wants Powell gone. If he dropped his probe, Tillis would drop his objection to Warsh’s confirmation, and Powell would be out as Fed chair in thirty days. But Trump remains dispositionally incapable of such a tactical retreat."