Rep. Jim Himes (D-Conn.) said Sunday that a White House insider is warning President Trump of a “massive market reaction” if he fires Federal Reserve Chair Jerome Powell.
“I mean, what happens if there’s a tweet that says the Fed chair is gone?” CBS’s Margaret Brennan asked Himes on “Face the Nation.”
“Well, interestingly, inside the White House — and I don’t know who it is — my guess is, it’s maybe the Treasury secretary — is saying — and this is a very difficult thing to say to a person like Donald Trump — that, if you fire the Fed chair, either illegally, which they’re happy to do, or because you trump up some baloney-like charge associated with a renovation of the headquarters, there is going to be a massive market reaction, because you cannot lie to the capital markets,” Himes responded.
Trump has recently grasped on to the Federal Reserve’s multibillion-dollar makeover as a possible way to finally oust Powell.
The president has for months criticized Powell over the Fed’s decision not to cut interest rates, a move partly based on uncertainty surrounding Trump’s tariffs. Trump has stated his desire to remove Powell, whom he appointed during his last term in the White House.
Senate Republicans have recently warned Trump that it would be a large mistake to go forward on his threat to fire Powell, saying it would probably send a “shock wave” through the financial markets and rattle the larger economy.
Republican senators, including those who are strong supporters of the president, have warned that any action to oust Powell would jeopardize the Fed’s independence, which could erode investors’ confidence in American monetary policy and creditworthiness.
“I do not believe a president, any president, has the authority to fire the Federal Reserve chair,” Sen. John Kennedy (R-La.) said previously.
The Hill has reached out to the White House and the Treasury Department for comment.
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