Trump says he never threatened to demote Fed head Jerome Powell, but has the 'right' to do so

"I’m not happy with his actions, I don’t think he’s done a good job,” Trump said of his appointee.
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Jerome Powell, chairman of the Federal Reserve System, chats with guests during an event at Mississippi Valley State University on Feb. 12, 2019.Andrea Morales / for NBC News

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/ Source: CNBC.com
By Spencer Kimball, CNBC

President Donald Trump said he never threatened to demote Federal Reserve Chairman Jerome Powell, though he maintained he has the authority to do so.

“I didn’t ever threaten to demote him,” Trump said in an interview with NBC’s “Meet The Press” that aired on Sunday. “I’d be able to do that if I wanted, but I haven’t suggested that.”

“I have the right to do that, but I haven’t said that,” the president continued. Trump went on to criticize the Fed for raising interest rates, saying Powell made a mistake.

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“Obama had someone that kept the rates very low,” Trump said. “I had somebody that raised the rates very rapidly — too much. He made a mistake, that’s been proven.” The Federal Reserve on Wednesday held interest rates steady, indicating that there would not be a cut in 2019. The central bank, however, forecast one to two possible rate cuts in 2020. When asked Tuesday whether he wanted to demote Powell, Trump said: “Let’s see what he does.”

Bloomberg had reported that Trump considered demoting Powell in February, but White House economic adviser Larry Kudlow said the president wasn’t currently considering such a move.

“It’s a six-month-old story,” he told reporters. “It allegedly happened six months ago and it’s not happening today and therefore I have nothing to say about it. It is what it is.”

Powell was asked point blank at a news conference after the Wednesday Fed meeting about how he would react if Trump said he wanted to demote him.

“I think the law is clear that I have a four-year term, and I fully intend to serve it,” Powell said.

When asked whether he should address Trump’s repeated criticism, the Fed chairman said he doesn’t “discuss elected officials publicly or privately.”

The Fed raised interest rates four times last year and originally indicated two more rate hikes in 2019. The central bank pivoted and adopted a more dovish stance after its hike in December sent markets reeling. Trump has repeatedly claimed the stock market would be higher and economic growth stronger if the Fed had not raised rates.

Trump was also asked whether he believed Fed policy would jeopardize his re-election chances.

“I think the economy is so strong we’re going to bull through it,” the president said. “But I’m not happy with his actions, I don’t think he’s done a good job.”