FIRST ON FOX: A House Republican wants to give President Donald Trump an easier pathway to firing Federal Reserve Chair Jerome Powell.
Trump has previously threatened to fire Powell for not lowering interest rates and has gone so far as to draft a letter giving him the boot. Despite his frustration, the president has changed course and said he would allow Powell to finish his term that expires next May.
Still, he’s already looking for a replacement.
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However, the legal path to firing Powell, should Trump change his mind between now and next year, is complicated.
The Federal Reserve Act of 1913, which established the central bank, stipulates that the president can only fire the chair “for cause,” meaning Powell would have to engage in serious misconduct to get the can.
Rep. Buddy Carter, R-Ga., wants to change the Federal Reserve Act to make it easier for Trump to fire Powell.
“Federal Reserve Chair Jerome Powell needs to go, and the president should have the power to make that decision without question,” Carter told Fox News Digital. “He’s been too late to cut rates, and it is directly harming the American people.”
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Carter plans to introduce a bill, called the Timely Oversight of Operations, Liquidity, Accountability, Targeting, and Effectiveness Act, or the TOO LATE Act — a dig at Trump’s nickname for the Fed chair — that would change the law to lay out a slew of causal reasons why the president could fire Powell.
His bill, first obtained by Fox News Digital, would allow Trump to remove Powell if, for two consecutive quarters, the federal funds target rate deviates by more than 200 basis points from an average generated by any pair of a slew of benchmarks.
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Those benchmarks include the implicit price deflator for personal consumption expenditures, the difference between the yield of a five-year Treasury bond and the yield of a five-year Treasury Inflation Protected Security, and the difference between estimates of unemployment of the Board relative to the projections of the Congressional Budget Office.
If any of the two benchmarks are hit, Trump could then write a letter giving a reason why he wants to remove Powell, which would then be submitted to Congress and reviewed within 30 days by the House Financial Services and Senate Banking, Housing and Urban Affairs committees.
“With this bill, we will restore proper oversight of the Federal Reserve and give the president another tool in his tool chest to strengthen and grow the economy,” Carter said.
The Federal Reserve Board of Governors declined to comment when reached by Fox News Digital.
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