Viewpoint: If Trump wants to cut interest rates, he will have to fire the entire Federal Reserve Board

BlockBeats News: On April 23rd, US President Trump's public criticism of Federal Reserve Chairman Powell has intensified concerns about his attempt to dismiss the central bank governor. However, even with this historically significant and legally controversial measure, Trump may still be unable to steer monetary policy in the direction he expects. Several economists have stated that even if Powell is fired, it may not necessarily give Trump the interest rate cuts he wants. Paul Ashworth, Chief North American Economist at Capital Economics, pointed out in a recent report that "firing Powell is likely only the first step in undermining the independence of the Federal Reserve. If Trump is determined to lower interest rates, he will also have to fire the other six members of the Federal Reserve Board, which will trigger more severe market turbulence, causing the US dollar to fall and the long end of the US Treasury yield curve to rise Powell is both the Chairman of the Federal Reserve Board of Governors and the Chairman of the Federal Open Market Committee (FOMC) responsible for formulating interest rate policies. Ashworth pointed out that although FOMC members typically choose the chairman of the board appointed by the president to lead them, they can also go against Trump's wishes and choose someone else to head the interest rate setting committee. Trump referred to the Federal Reserve chairman as a 'major failure' in a social media post on Monday, which shook financial markets. White House economic advisor Kevin Hassett stated last week that the President and his team are exploring the possibility of removing the Federal Reserve Chairman. However, on Tuesday, Trump changed his statement and stated that he "undoubtedly" fired Powell.