[Source/Observer Network by Shao Yun] According to a report by The Wall Street Journal on April 17, U.S. President Trump has been privately discussing "firing" Federal Reserve Chairman Powell for several months and expressed preference for former Federal Reserve Councilor Kevin Warsh (Kevin Warsh) to replace him.

However, it is understood that Trump has not yet made the final decision whether to dismiss Powell before the end of his term next year. Politico said that Treasury Secretary Beasant has consistently opposed the idea of dismissing Powell in discussions with other White House advisors, warning multiple times that such an action could disrupt the stability of the U.S. financial market.

The Wall Street Journal cited sources familiar with the matter as saying that Trump and Warsh have met multiple times at Mar-a-Lago to discuss the possibility of dismissing Powell prematurely. Their discussions continued until February. Warsh suggested not dismissing Powell and advocated allowing the latter to complete his term without interference. However, several people who had spoken with Warsh over the past year said that Warsh gave the impression that once Powell's term ends, the position of Fed chairman would almost certainly be given to him.

According to reports, during Trump's first term, he had interviewed Warsh for the position of Fed chairman. Warsh was the economic assistant to former U.S. President George W. Bush and was appointed as a member of the Federal Reserve Board by Bush in 2006. During the 2008 financial crisis, Warsh played a key role in communication between Washington and Wall Street. After leaving the Federal Reserve in 2011, Warsh has been working with renowned investor Stanley Druckenmiller (Stanley Druckenmiller), mentor and close friend of Treasury Secretary Beasant.

Local time on November 2, 2017, Washington, D.C., Trump announced the nomination of Powell as the Federal Reserve Chairman candidate, Visual China

Other individuals closely related to Trump also discussed firing Powell with him recently in early March. The report said that Trump's advisors were divided. Some believed that the current independence of the Federal Reserve has been elevated to a constitutional level that is not recognized, which is detrimental to the U.S. economy, so they wanted to find ways to "more directly strike" Powell; Beasant consistently strongly opposed replacing Powell, believing that the potential costs outweighed the possible benefits.

Powell's term will end in May 2026. Beasant said this week that the White House plans to begin interviewing candidates for the next Federal Reserve Chairman around six months before the end of Powell's term, in the fall of this year. He compared the independence of the Federal Reserve's monetary policy to a "precious box that needs protection," but stated that its bank regulatory functions have room for adjustment and can coordinate with two other regulatory agencies - the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).

According to sources familiar with the matter, Trump has not made a final decision, but any opposition voices from White House advisors have not stopped Trump from privately advocating for Powell's dismissal. Congress passed the Federal Reserve Act in 1913, authorizing the establishment of the Federal Reserve independently to formulate financial policies, and the act stipulates that the Federal Reserve Chairman can only be dismissed for "just cause." However, Trump believes that if he appeals to the court, this provision may not hold up.

According to a precedent in 1935, the U.S. Supreme Court prohibited the president from dismissing officials of independent institutions exercising quasi-legislative and quasi-judicial powers purely for political reasons. In February, the Trump administration indicated that the Supreme Court should overturn the precedent known as the "Humphrey's Executor" case, arguing that this precedent infringes on the president's control over the executive branch.

The Wall Street Journal said that Trump then forcefully pushed this matter by dismissing two Democratic members of the National Labor Relations Board (NLRB) and the Merit Systems Protection Board (MSPB). Last week, the Department of Justice filed an emergency appeal with the Supreme Court, requesting authorization for the president to dismiss these two senior officials, stating that the president "should not be forced to delegate executive power to those who clearly oppose the government's policy objectives."

An analysis suggests that this ruling might open a legal path for Trump to dismiss Powell. Powell said on the 16th that he did not think the new precedent would ultimately apply to the Federal Reserve, but he "is closely monitoring developments." Some U.S. media outlets expect that even if the U.S. Supreme Court really overturns the 1935 ruling, it would try to protect Federal Reserve board members from dismissal. Additionally, such litigation usually takes a long time and may not have a final outcome until after Powell's term ends.

In his first term, Trump frequently publicly criticized the Federal Reserve and Powell, often urging the Federal Reserve to cut interest rates. Since the start of his second term, Trump has repeatedly pressured Powell to cut interest rates. Just yesterday (April 17), Trump posted on his self-created social media platform Truth Social criticizing Powell's actions as "too late and wrong." "He should have cut interest rates like the European Central Bank long ago," Trump wrote, "…the sooner Powell leaves, the better!"

Trump's post screenshot, Truth Social

According to Politico, insiders at the White House see Trump's post more as an attempt to put pressure on Powell rather than an immediate effort to remove him, in order to find a scapegoat for potential future economic problems. This public call may also be an attempt to pressure Powell into yielding on monetary policy. Of course, considering Trump's usual modus operandi, there is a possibility that he may change his mind in the future and seriously push for Powell's dismissal.

"I don't think he will do it, but frankly, (Trump's dissatisfaction with Powell) is like a hand grenade with the pin pulled out," a knowledgeable insider who wished to remain anonymous bluntly stated, "so no one can guarantee what will happen."

This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7494480353194590758/

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