Trump’s Flip-Flop: Is He Really Keeping Jerome Powell as Fed Chair?

WASHINGTON (AP) — President Donald Trump declared Wednesday that he was “highly unlikely” to fire Federal Reserve Chair Jerome Powell, a statement made less than 24 hours after suggesting in a private meeting that he was leaning towards dismissing the head of the nation’s central bank.

Trump confirmed that during a White House meeting Tuesday night with about a dozen House Republicans, he had discussed the “concept” of dismissing Powell, who has long been a target due to his refusal to lower interest rates as Trump desires.

“Almost every one of them said I should,” Trump remarked about the lawmakers who had come to discuss crypto legislation with him.

According to a White House official, Trump indicated he was leaning in that direction. During the session, Trump brandished a letter about firing Powell, but a person familiar with the matter stated it was essentially a prop drafted by someone else and that the Republican president had not authored such a letter himself.

Neither source was authorized to publicly discuss the private meeting and spoke only on condition of anonymity.

Trump made his comment about being “highly unlikely” to dismiss Powell — “unless he has to leave for fraud” — during an Oval Office meeting with Salman bin Hamad Al Khalifa, the crown prince of Bahrain.

In recent days, White House and administration officials have accused Powell of mismanaging a $2.5 billion renovation project at the Fed, adding to months of efforts by Trump to distance himself from the politically independent central banker.

U.S. stocks wavered as Trump spoke about Powell on Wednesday. The S&P 500’s modest morning gain turned into a 0.7 percent drop after initial reports that the president might fire the Fed chair. Stocks then pared their losses following Trump’s subsequent comments.

Treasury yields also fluctuated in the bond market but remained relatively stable.

Those attending the White House meeting were among the more conservative lawmakers, including members of the House Freedom Caucus whose views often diverge from mainstream Republicans. In the Senate, Republicans have taken a more cautious approach. Some have supported Powell’s performance at the Fed as they await an inspector general’s review of the construction project.

In a speech Wednesday, Sen. Thom Tillis, R-North Carolina, warned that if Powell is dismissed, “you are going to see a pretty immediate response.”

“If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they’re making a huge mistake,” said Tillis, who has announced he will not seek reelection.

Sen. John Kennedy, R-Louisiana, stated this week that Powell “has done a decent job.”

“I don’t think he’s been perfect,” he acknowledged, adding that there have been times they disagreed, but “I do believe that the chairman is calling them like he sees them.”

Republicans on the House Financial Services Committee had scheduled a meeting with Powell for Wednesday evening, an engagement set months ago. However, it was abruptly canceled due to votes in the House, according to a committee aide speaking on condition of anonymity.