House Speaker Mike Johnson said he is “disenchanted” with Jerome Powell, as President Donald Trump attacks the Federal Reserve chairman over frustrations with high interest rates.Asked about whether he would support Trump firing Powell, Johnson, who has strong ties to the president and was in the Oval Office as recently as Tuesday, said he was unclear on the legal authority to dismiss the Fed chief.
“But I will tell you that I have been, can I use the word disenchanted?” Johnson said in an interview with Bloomberg reporters and editors.
Congress has oversight authority over the central bank, but only the president has the power to remove Powell or other members of the Fed’s Board of Governors, and then only for cause. House Democratic leader Hakeem Jeffries on Wednesday warned that firing Powell would “crash the American economy.”Johnson also signaled he’s open to modifying the Federal Reserve Act, the 1913 law that established the central banking system, a move that has typically been resisted by Fed officials. The last major set of changes to the law came as part of the 2010 Dodd-Frank Act, Congress’ effort to increase oversight of major banks after the financial crisis.“I think all the scrutiny is appropriate,” Johnson said, citing investigations into the cost of renovating the Fed’s downtown office buildings and Treasury Secretary Scott Bessent’s decision to explore “mission creep” at the central bank.Powell Probe
Federal Housing Finance Agency Director Bill Pulte, a major Powell detractor and a close ally of Trump, has called on Congress to investigate the Fed chief and recently told Bloomberg TV that he’s confident there would be a probe.Johnson, who said he gives his committee chairmen wide latitude, said he wasn’t aware of an investigation into Powell but didn’t rule out future action.“The Oversight Committee has been very aggressive in their responsibilities, and maybe that becomes part of their focus,” he said.More broadly, Johnson said the Fed is ripe for greater congressional scrutiny because “it has a direct bearing on the lives of every single American.”Like Trump, Johnson wants interest rates lowered, citing the challenges consumers face buying homes and making other big purchases.“Just shaving off a small amount, the interest rate could really do a great deal of good to the sectors of the economy that are still lagging a little bit,” he said.Proceeding With Caution
When it comes to modifying the law governing the Federal Reserve and its jurisdiction, the “devil’s in the details,” Johnson said.“I’m not even sure where the original constitutional authority is for the Fed,” said Johnson, who made a career as a constitutional lawyer before arriving in Congress. “There is probably some need to reform, but we would have to study that very carefully before Congress got involved in anyway to the extent we have jurisdiction over it. You would not want to do it in a reckless manner.”Powell has endured weeks of attacks from Trump and other Republicans within the administration and in the Capitol. Trump has walked back comments made in private about ousting Powell, saying publicly he would allow the chairman to finish out his term.Bessent said on Bloomberg Television’s Surveillance program Wednesday there’s “no rush” to identify a successor for the Fed chairman, whose term ends in May, though the process is underway.“There are a lot strong candidates, including several who are on the main board and perhaps regional bank presidents,” he said, without providing specific names.Reports have indicated that Bessent himself could be in the running, along with National Economic Council Director Kevin Hassett, former Fed board member Kevin Warsh and current Governor Christopher Waller.Read Also: South Korea’s economy posts rebound amid tariff, property risks
Source link
