Will Trump and Powell be on a collision course?

President Donald Trump could be considering his own favourite pick for the position of Federal Reserve Chairman other than Jerome Powell upon taking office next January to emphasize the constitutional responsibility of all executive branch officials to the president.

The dispute arises from the Federal Reserve’s power over national monetary policy, which includes the authority to set interest rates. Trump’s economic program’s success depends on the Fed’s decisions, and if Powell resists Trump’s demands for a more relaxed, growth-oriented monetary policy, Trump may want to fire him.

The legal question has two aspects: statutory and constitutional. The Constitution vests the executive power of the federal government solely in the president and the responsibility to take Care that the Laws be faithfully executed.

The Supreme Court’s recent cases curtailing the independence of other federal agencies suggest a different course for Powell. Powell’s dismissal of presidential power to remove him may be seen as a red flag for Trump. If Trump seeks to take Powell up on his provocation, he will win in court, inflicting more harm on the Fed’s credibility than even its failure to head off the destructive inflation of the Biden years.