National Economic Council Director Kevin Hassett recently discussed President Trump’s authority over Federal Reserve Chair Jerome Powell. In an interview, he confirmed that this authority is currently under review.
Hassett noted that if there’s sufficient reason, the president can indeed fire Powell. This conversation follows Office of Management and Budget Director Russell Vought’s critique of the Federal Reserve’s renovations, which raised concerns about spending and proper oversight. Vought sent Powell several inquiries regarding these renovations, emphasizing that Trump is quite troubled by the Federal Reserve’s management.
When asked if the renovation costs could impact Powell’s position, Hassett suggested that the president’s decision would depend heavily on Powell’s responses to Vought’s questions. Trump has been vocal about his dissatisfaction with Powell, often criticizing him for not lowering interest rates. While he previously said he had no plans to terminate Powell’s tenure, his recent comments imply he is reconsidering that stance.
In May, the Supreme Court ruled that the president could dismiss members of independent federal agencies, yet it noted that this doesn’t directly apply to the Federal Reserve, due to its unique structure.
As for tariffs, the administration is about to implement steep ones on imports, particularly from Brazil. Trump has stated his decision is influenced by Brazil’s internal political issues, including the charges against former President Jair Bolsonaro. Hassett explained that the tariffs aren’t solely about trade deficits but are also tied to Brazil’s actions, which he described as shocking to the president.
This tariff strategy raises questions about U.S.-Brazil relations, especially considering the trade surplus the U.S. enjoyed with Brazil last year. Hassett argued that the administration aims to bolster domestic production to address the trade deficit and potential national security risks.
It’s clear that the ongoing debates and decisions around trade and the Federal Reserve have far-reaching implications. As these policies unfold, experts raise concerns over their effectiveness and potential unintended consequences.
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