According to reports from financial media outlets, US President Donald Trump on Friday (June 27) launched another scathing attack on Federal Reserve Chair Jerome Powell. Trump stated that he'd "love him (Powell) to resign if he wanted to", and said that Powell "has done a lousy job", calling him "stupid."
Trump also suggested he would appoint someone more inclined to lower interest rates as the next Fed Chair.
"If I think somebody's going to keep the rates where they are… I'm not going to put them in. I'm going to put somebody that wants to cut rates. There are a lot of them out there," Trump said.
Though Trump claimed he would soon announce Powell's successor, Powell's current term still has 11 months remaining.
This unprecedented move has drawn criticism from former Fed officials and economists, who caution that such actions could weaken Powell's authority and exacerbate economic uncertainty in the US.
Former Federal Reserve Vice Chair Alan Blinder described the idea as "absolutely terrible," warning that it would force markets to contend with potentially conflicting visions for monetary policy.
Greg Valliere, chief US policy strategist at AGF Investments, echoed this sentiment, saying, "This is a terrible idea, sure to annoy and confuse financial markets if there are two Fed Chairs."
Kathryn Judge, a professor at Columbia Law School, added that the outcome of such a situation depends heavily on the loyalty of the new appointee to Trump. But she further pointed out that people don't know what the consequences will be because this is an unprecedented scenario.
Historically, US presidents have waited until the final months of a Fed Chair's term to nominate a successor. Reports suggest, however, that Trump is considering announcing Powell's replacement as early as this summer, with some speculation pointing to a September or October timeline.
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