U.S. Treasury Secretary Steven Mnuchin denied Saturday that President Donald Trump was considering firing the country's central bank chief, after the latest rate hike sparked such rumors.
Mnuchin tweeted that Trump told him in a conversation that he "never suggested firing" Federal Reserve Chairman Jerome Powell. "Nor do I believe I have the right to do so," Mnuchin quoted Trump as saying.
According to Mnuchin, however, Trump said "I totally disagree with the Fed policy," including increasing the interest rate, with the fourth consecutive one announced Wednesday by the Federal Open Market Committee, the Fed's decision-making body.
The president said that the rate hike, as well as the shrinking of the Fed portfolio, "is an absolute terrible thing to do at this time," Mnuchin tweeted.
The treasury secretary's clarification came amid reports that Trump was weighing the option of ousting Powell because of his intensifying frustration with the central bank governor and the continuing stock market losses over the past several months.
In a tweet Wednesday before the Fed policy meeting, Trump warned the policy makers not to "make yet another mistake" by raising the interest rates. "Feel the market, don't just go by meaningless numbers," he said.
The president did not refrain from publicly criticizing the Fed on previous occasions as well. He has blamed its monetary tightening for hampering his administration's effort to expand the economy, and told reporters in October that he thought the Fed is "so tight" and "has gone crazy."
During a public appearance in Dallas, Texas on Nov. 14, Powell was asked by Federal Reserve Bank of Dallas President Robert Kaplan to comment on him being "mentioned by political leaders over the last several months," a veiled reference to Trump's harsh words toward the central banker and the institution he leads.
"That was very delicate, Rob," Powell interjected. In response, he said the Fed has the means it needs to serve the public in a "non-partisan, professional way."
"We have a very important job that Congress has assigned us: Serve the public. That's our sole focus," Powell said in defense of the Fed's policy decision. "We're just trying to do our jobs, and we're doing fine."
In the United States, the Fed is supposed to conduct monetary policy and fulfil its other responsibilities independent from political influence of the administration. The seven members of the Federal Reserve Board each has a 14-year term, which means unless they resign, their tenure will surpass the eight-year term limit for the U.S. president.
While the president appoints the seven-member board of governors, including the chairman, the central bank "derives its authority from the Congress, which created the Federal Reserve System in 1913 with the enactment of the Federal Reserve Act," according to the Fed's website.
The Federal Reserve Act stipulates that the Fed chairman can be "removed by the president for cause," and the Senate must sign off on replacements.
Experts said that the stipulation means the president can only fire the central bank chief if the latter violated the law, and that a presidential move against the chairman would deal an unprecedented blow to the Fed's independence.
Powell assumed the Fed chairmanship in February to succeed Janet Yellen. He was confirmed by the Senate to serve a four-year term.
