The president of the United States, Donald Trump, has intensified his offensive against the Federal Reserve by warning that he will fire its chairman, Jerome Powell, if he does not leave office in May, when his term at the head of the central bank expires.
“Then I will have to fire him” he said this Wednesday in an interview granted to Fox News. Statements that represent a new episode in the escalation of tensions between the White House and the monetary authority, whose independence has been questioned by the Executive's pressures to accelerate the lowering of interest rates in a pre-election context.
Judicial investigation
The political pulse coincides with an investigation opened by the United States Department of Justice into cost overruns in the remodeling of the Federal Reserve's headquarters in Washington. In this context, prosecutors led by Jeanine Pirro appeared without prior notice at the works, in an unusual move that has been interpreted as part of the institutional pressure on Powell.
The investigation focuses on the increased cost of the project, whose budget has gone from 2,500 to more than 3,000 million dollars. However, from the Fed's circle it is considered that the judicial process responds more to political motivations than to solid indications of irregularities.
Institutional clash and doubts about independence
Although Powell's term as chairman concludes in May, his position as a member of the Fed's board extends until 2028, which opens a scenario of conflict if he decides to remain in the institution.
Trump has already proposed Kevin Warsh as a replacement, whose nomination must be ratified by the Senate. However, several legislators have warned that they will block the appointment as long as the investigation against Powell remains open. The Executive's pressures have generated an unusual wave of support for the Fed chairman from different political and economic spheres, including figures from both parties, who warn of the risk of undermining the central bank's autonomy.