Kiichiro Sato/Associated Press
President Trump’s relentless public criticism of the man he picked to run the Federal Reserve, Jerome Powell, isn’t broadly shared by lawmakers who confirmed the central bank leader to his post last year.
The Fed chairman heads to Capitol Hill for two days of testimony beginning Wednesday, and lawmakers on both sides of the aisle have mostly commended the job he is doing. In interviews, they declined to endorse Mr. Trump’s call for the Fed to cut interest rates and said they would oppose efforts by the president to remove Mr. Powell from office.
Mr. Trump is angry Mr. Powell hasn’t reduced rates to prevent the dollar from gaining strength against other currencies. “He’s not doing a good job,” Mr. Trump said in a television interview last month. “I have the right to demote him. I have the right to fire him.”
The law says Fed officials can only be removed from the board for cause, which courts have interpreted to mean malfeasance or dereliction of duty. It is unclear whether the standard applies to the four-year term of the chairman, leading to speculation Mr. Trump could attempt to replace Mr. Powell through a demotion.
“It would be a very bad idea,” said Sen. Pat Toomey (R., Pa.). “The chairman has done an outstanding job.”
“Donald Trump is too smart to do something like that,” said Sen. John Kennedy (R., La.). “I’ve got a lot of confidence in Powell, and he’s done a damn good job.”
“I think the Senate, even the Republican Senate, would not be quiet about that,” said Sen. Richard Shelby (R., Ala.). “The Federal Reserve—this is important—was set up to be independent as much as you can from politics. I would hope no one would really try to politicize the Fed.”
Mr. Shelby said it isn’t unusual for presidents to favor looser monetary policy, particularly as they head into a re-election campaign. “But with inflation low, growth good, unemployment low, stable commodity prices and everything else, the Fed’s been pretty wise up to now,” he said.
Some Democrats have voiced alarm over steps by the Fed and other bank regulators to loosen capital standards, stress tests and other rules implemented after the 2008 crisis.
“There seems to be a collective amnesia at the Fed about what happened a decade ago,” said Sen. Sherrod Brown (D., Ohio).
Still, Mr. Brown said, Democrats would oppose any efforts by the White House to strip Mr. Powell of his duties. Mr. Brown said when he raises his policy objections in meetings with Mr. Powell, the Fed leader “is always professional, always warm, always substantive, always seems to listen.”
The Fed’s relationship with Capitol Hill matters because Congress created the central bank and has the power to change its legal mandate to maintain stable prices and maximum employment. Mr. Powell pledged last year to “wear out the carpets” on Capitol Hill to make sure lawmakers felt the Fed was responsive to their concerns. During his 16 months as chairman, he held meetings individually or in small groups with around 116 lawmakers, about evenly divided between both parties, according to his public calendars.
Sen. Tina Smith (D., Minn.) said Mr. Powell brought an “honest curiosity” about the economy in her home state when they met in February.
“He’s a man of serious integrity who understands the historic importance of the role he’s been asked to play right now,” she said.
Mr. Trump’s criticism of Mr. Powell wasn’t a subject of conversation at a bipartisan dinner Sen. Lamar Alexander (R., Tenn.) arranged with Mr. Powell and 10 other senators from both parties last fall, said several attendees. “He is well respected within the Senate,” said Mr. Alexander, who served in the George H.W. Bush administration with Mr. Powell.
Mr. Kennedy said that he appreciated how in his interactions with Mr. Powell, he couldn’t tell to which political party the Fed chief belongs. (Mr. Powell is a registered Republican.)
The Fed has raised its benchmark rate nine times since 2015, most recently this past December to a range between 2.25% and 2.5%. In 2017, the Fed began shrinking its $3.8 trillion asset portfolio, which swelled this decade when the central bank bought Treasurys and mortgage bonds to stimulate growth. It is set to stop the asset wind-down in September.
The Fed voted to hold rates steady at its policy meeting last month, but Mr. Powell said concerns about global growth and trade uncertainty had made interest-rate cuts more likely in the months ahead.
During his campaign for president in 2016, Mr. Trump said the Fed’s postcrisis stimulus measures were fueling asset bubbles. But over the past year, he has criticized the Fed for withdrawing this support from the economy. In recent months, he has called on the Fed to resume its bond-buying program and to cut its benchmark rate by 1 percentage point.
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Several Republican lawmakers refused to say whether the Fed should lower interest rates. “The Fed chairman is in a better position than almost anybody to assess the economy,” said Mr. Alexander.
Mr. Toomey said he didn’t think interest rates are now unnecessarily restricting economic growth. “We can quibble about exactly what the current rates ought to be, but we can’t be far away from an appropriate level,” he said. “Every president likes low interest rates…but sometimes low interest rates aren’t the best thing for the economy.”
Write to Nick Timiraos at [email protected]