Trump says he has no plans to remove Powell despite probe

U.S. President Donald Trump shakes hands with Federal Reserve board member Jerome Powell after announcing him as his nominee for the next chair of the Federal Reserve, in the Rose Garden of the White House in Washington, Nov. 2, 2017. Photo by AP Photo/Alex Brandon

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Still, the president said he had not arrived at a conclusion about whether the probe would give him grounds to oust the Fed chair, saying it’s “too early” to say.

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“Right now, we’re (in) a little bit of a holding pattern with him, and we’re going to determine what to do. But I can’t get into it,” he said.

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Federal law states that Federal Reserve governors can only be fired for cause, and not policy differences.

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Trump also maintained he was unconcerned by Republican lawmakers who had criticized the investigation over concerns it was an attempt to influence rate decisions.

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“I don’t care,” Trump said. “There’s nothing to say. They should be loyal. That’s what I say.”

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The president on Tuesday said he intended to push ahead with plans to nominate Powell’s replacement within “the next few weeks” despite a threat from Senator Thom Tillis, a retiring North Carolina Republican on the Senate Banking Committee, who has said he would block Fed nominations until the investigation was resolved.

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Trump, in his Reuters interview, praised two previously touted candidates: top White House economic adviser Kevin Hassett and former Fed Governor Kevin Warsh.

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“The two Kevins are very good,” Trump said, adding, “You have some other good people too, but I’ll be announcing something over the next couple of weeks.”

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Powell said on Sunday that the Justice Department had served the Fed with grand jury subpoenas, stemming from a probe into the renovation project and Powell’s testimony to Congress about it.

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The probe marks a dramatic escalation of the Trump administration’s attacks on the Fed and raises new questions about the institution’s independence. Trump has repeatedly toyed with trying to fire Powell before his term as chair ends in May, and is currently weighing whom to nominate as his successor.

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Powell, in a statement Sunday, called the renovation investigation pretext for a broader pressure campaign about rates.

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“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” he said.

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With assistance from Josh Wingrove

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