WASHINGTON (Reuters) - U.S. President Donald Trump has privately discussed the possibility of firing Federal Reserve Chairman Jerome Powell, a move that could roil already volatile financial markets, two sources familiar with situation said on Saturday.
The sources added that they do not expect Trump to dismiss the U.S. central bank chief, despite the president’s public and private objections to the Fed’s interest rate-hiking campaign and his repeated criticisms of Powell, whom he appointed.
U.S. Treasury Secretary Steven Mnuchin, however, tweeted late Saturday that Trump had told him that never suggested dismissing the Fed chief.
“I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so,” Mnuchin quoted Trump as telling him.
The White House and a Fed spokeswoman declined to comment.
An attempt to remove the Fed chairman would be unprecedented and seen as an attack on the U.S. central bank’s independence, which is meant to insulate it from political considerations. It would be on potentially shaky legal ground, and would probably hit financial markets around the globe hard.
The Federal Reserve Act allows a president to dismiss a Fed board member for “cause,” and Trump’s frustrations with the central bank’s rate hikes would likely fall short of that mark. The law, however, is untested on dismissing a chairman, who also holds a separate term as a board member.
Trump’s top economic adviser, Larry Kudlow, said in November he did not believe it would be possible for Trump to remove Powell as chairman, while leaving him on the board.
“I don’t think so. It’s a
