So what will happen if FED chair is replaced?

[LogitechMouse]

I ask ChatGPT with this one and it says:

Donald Trump does not have the direct legal power to fire the Federal Reserve Chair Jerome Powell at will — at least, not without cause.
Legal Context:
-The Federal Reserve Act gives the Fed Chair a 4-year term (though the Chair can be reappointed).
-The law doesn’t clearly outline grounds for removal, but tradition and legal interpretation imply that removal is only allowed "for cause" — meaning misconduct or incapacity.
-A President cannot fire the Fed Chair just for policy disagreements, such as over interest rates.

We've been hearing from Trump that he will fire Powell if he will not adjust the interest rates. I bolded the text saying that the President can't just fire the FED chair just because of not adjusting the interest rates. The only reason that the FED can be removed is through misconduct or incapacity, and neither of the two is present especially incapacity.

In short, Trump doesn't have the power to do it. The only way is when Powell himself resigns which I don't think will happen anytime soon. As for what can happen if that happens, expect huge market fluctuations maybe just like when the tariff drama is at it's peak.

[Lucius]

I ask ChatGPT with this one and it says:
~snip~

Why ask for help from AI when some members in this thread wrote practically the same thing? The president does not have the power to remove the head of the FED, just as he does not have the power to remove the head of the SEC (he left of his own free will).

I don't think Trump has the constitutional power to dissolve the fed, i don't even think he has the power to fire the fed chairman. Trump did not fire Gensler, he resigned after Trump won the election. I believe we will find out soon enough what Trumps idea is with all this crazy tariffs, it is madness.

Things would shift bigly if he fires himself and bans the fed.
Making himself in charge of interest rates.
I wonder if he be threatening default of the dollar soon.

Do you think it's completely impossible for that to happen? In just a few months, the current US president has turned the world upside down, declared allies to be enemies, while at the same time warming relations with countries that do terrible things in the name of some crazy ideas.

Some in the US are already claiming today that this administration has done damage that will be felt for decades, not only in financial terms but also in terms of the trust that has been built practically since World War I.

[Z-tight]

Some in the US are already claiming today that this administration has done damage that will be felt for decades, not only in financial terms but also in terms of the trust that has been built practically since World War I.

I cannot help but agree with them who say this, i don't understand what Trump thinks before he does what he does, or if he listens to advice, or are his advisers all hotheaded like him. There is nothing wrong is making changes as a newly elected president, but not changes that have widely negative implications.

[Lucius]

@Z-tight, maybe it's just that one man is intoxicated with the power that has been given to him, or maybe it's that he simply doesn't care what happens in 4 or 8 years because nature will do its thing, just like it does with every man. A man who is not responsible today is certainly not a man who thinks about the future.

Trust takes a long time to build, but it can be destroyed literally overnight, which is exactly what happened. Still, I think that even from this chaos something good can come out, at least as far as the EU is concerned and its awareness that it finally needs to free itself from dependence on the US when it comes to the security of its borders.

Someone stated the following: "The EU, as a community of 500 million people, asks the US (330 million) to defend them from Russia, which has 150 million people" - really incomprehensible, isn't it?

[Aanuoluwatofunmi]

This is a game of politics, if Jerome Powell is not ready to comply with the administrative rules and leadership of Trump, then things might not work out for them both and it's either Trump got his ass kicked out or Jerome collide with other members to make the conditions of the situation more worst than ever, so that it will be more pronounced and well projected to the world that his administration is bad and unfit for the development the world economy needed.

[target]

This is a game of politics, if Jerome Powell is not ready to comply with the administrative rules and leadership of Trump, then things might not work out for them both and it's either Trump got his ass kicked out or Jerome collide with other members to make the conditions of the situation more worst than ever, so that it will be more pronounced and well projected to the world that his administration is bad and unfit for the development the world economy needed.

Trump will find a way to get what he wants and this idea may not even his anymore but to some big institutions pressuring him also because who would want the US to fail. Not cutting rates will be more devastating to the people and the markets. They have to pump and only the FED chair is hindering this goal.

The country though is more divided than how it was during Biden. We'll see what happens but this is definitely making the markets uncertain.

[Bobcrypto]

First he removed Gensler from the SEC and now Powell from FED and speculated that its because the FED is not cutting rates still despite the difficulties in the economy these days.  So what do you think will happen if FED chair is replaced?  Of will Trump dissolve FED?

Markets will ‘crash’ if Trump has the power to fire Fed’s Powell, Sen. Elizabeth Warren says

the central bank should be independent of politics and if trump gets the power to fire anyone on his own will other institutions might become wobbly the usa would not be far from what a dictatorship would be if trump can just wave his magic wand around

If eventually fed chairman is remove or he resign, it will not crash to the market, the effects of the tarrif war has already caused a lot losses on the market. The stock, commodity and others has already lost trillion of dollars, and I don't think Powell remover will be have bigger impacts than what the market has already Lost this few weeks.
I think senator Elizabeth ideas was just her opinion, some other persons might have a different ideas about Fed chairman removal in my opinion.

[electronicash]

First he removed Gensler from the SEC and now Powell from FED and speculated that its because the FED is not cutting rates still despite the difficulties in the economy these days.  So what do you think will happen if FED chair is replaced?  Of will Trump dissolve FED?

Markets will ‘crash’ if Trump has the power to fire Fed’s Powell, Sen. Elizabeth Warren says

the central bank should be independent of politics and if trump gets the power to fire anyone on his own will other institutions might become wobbly the usa would not be far from what a dictatorship would be if trump can just wave his magic wand around

If eventually fed chairman is remove or he resign, it will not crash to the market, the effects of the tarrif war has already caused a lot losses on the market. The stock, commodity and others has already lost trillion of dollars, and I don't think Powell remover will be have bigger impacts than what the market has already Lost this few weeks.
I think senator Elizabeth ideas was just her opinion, some other persons might have a different ideas about Fed chairman removal in my opinion.

well if the plan is crush the middle class and no investors  coming to US because the rates are high and people couldn't pay their bills. i guess Powell has to be kept in his position.

how many times had he increased the rates since Biden sat?  and only a few times he lowered the rates the time when Biden was about to leave office. if the FED has all the tool to help, the FED should be doing it and not making things worse.

[Bobcrypto]

As far as politicians are concerned, every appointees under their regime will always play a long their plans, otherwise appointees and even some existing government officials may be shown the way out.
I think the Fed chairman may dance to the tune of the current administration of Donald Trump, or things will be made very difficult for him to perform creditably well through out his regime.
Banks, financial institutions, others supposed to operate independently from governments interferences but this is in theory, practically, politicians hardly give room for most of these  institutions to operate independently.

[target]

As far as politicians are concerned, every appointees under their regime will always play a long their plans, otherwise appointees and even some existing government officials may be shown the way out.
I think the Fed chairman may dance to the tune of the current administration of Donald Trump, or things will be made very difficult for him to perform creditably well through out his regime.
Banks, financial institutions, others supposed to operate independently from governments interferences but this is in theory, practically, politicians hardly give room for most of these  institutions to operate independently.

Trump isn't going to site and watch Jerome being independent as well.

Trump not having the power to remove Jerome Powell from the FED is just on papers. There is more he can do. Of course Trump can do something or maybe even accuse Powell of something else just as they do it in the 3rd world countries and then someone else has to replace him in the office. Politics is such cruel world for someone who mess with the people on top.

[yhiaali3]

Anyone who opposes the Great Leader and his boundless wisdom will become a target - and JP is currently a high priority target because he ignores "orders" from above. Although there is currently no legal possibility for the JP to be removed from his position, the possibility of this changing should not be ruled out - because those in power obviously do not hesitate to do anything.

Here we are again, accustomed to such rhetoric about a great leader here in my country.
This is one of the cases we discussed in a previous topic about countries claiming to be democratic. Unfortunately, this is happening in the country that is supposedly the most democratic in the world.

Like any dictator in the Middle East, Trump removes any figure who opposes his wise decisions, and there is no immunity for anyone.

Somewhere in the background, there is already talk about how the current president will be enabled to run again, even though by law he can only be president twice. There is actually a provision that prevents this, but it's all words on paper - if Putler and that little man from North Korea could do it, why couldn't the mighty Dony? Let's remember the statement before the election "vote just this once and you won't have to ever again" (something like that).

Yes, I heard this talk in the background, and about the possibility of changing the constitution to enable Trump to run for a third term. If this happened in a Third World country, the world would rise up against him, especially the United States, but here everyone is silent.

[Amug123]

I don't think Trump has the constitutional power to dissolve the fed, i don't even think he has the power to fire the fed chairman. Trump did not fire Gensler, he resigned after Trump won the election. I believe we will find out soon enough what Trumps idea is with all this crazy tariffs, it is madness.

you are very correct about Trump not having a constitutional power to dissolve the fed. The president authority over federal reserve is limited.  I think the  fed chair serves four years  term, and the president can appoint  or reappoint them, but removing them would require specific circumstances.

[MUGNIA]

It's just a political game in my opinion because the FED doesn't side with Trump, so he tries to pressure the FED chairman to resign himself with Trump's crazy policies. Maybe this works for their country, but how many countries are affected by Trump's policies? America feels they can stand alone without the surrounding countries, so we'll just have to see how long Trump's policies will last in the future.