US President Donald Trump made new statements regarding the Fed at a press conference on Covid-19. Criticizing the Fed’s recent policy, Trump emphasized that he could dismiss the Fed President if he wanted.
The US Federal Reserve (Fed) has taken several steps over the past few weeks to tackle the economic effects of the Coronavirus.
The Fed announced an interest rate cut of 50 basis points after the extraordinary meeting it held a few days ago. US President Donald Trump criticized the Fed’s move and said it was “late”, saying that the European Central Bank and the Central Bank of Japan kept interest rates lower than the Fed.
The Fed also announced recently that it will provide the economy with 1.5 trillion dollars of liquidity through repo operations to prevent a possible liquidity crisis.
Criticism of Trump
Donald Trump criticized the Fed’s policies at a press conference today. Trump says the Fed has been “following in the footsteps of other (central banks)” especially recently, and this is wrong. According to his statements, other central banks, not the Fed, should follow the Fed.
According to CNBC’s report, US President Donald Trump is not very happy with Fed President Jerome Powell’s recent decisions. He even plans to end Powell’s mission. Trump’s comment on the subject is as follows:
“I have the right to dismiss him. But I’m not. If I want, I can assign him to a different position and bring someone else to the Fed. But I haven’t made up my mind yet. ”
Jerome Powell’s term will expire in 2026 under normal circumstances. However, if Donald Trump finds a legitimate reason, he can end his post as president.
We do not know what effect the US Central Bank President’s dismissal by the country president will have on the global markets.