Dem
47
GOP
53
Fed Chairman Jerome Powell's term as chairman ends on May 15, so Donald Trump could leave well enough alone and he'd be gone as chairman in 3 months. But no, Trump has to prove he is top dog, so he sicced the DoJ on Powell for an imaginary fraud charge. Maybe Trump realizes that Powell's term as a member of the Fed's Board of Governors runs until Jan. 31, 2028, so he could continue as a regular governor for 2 more years if he wishes. Trump wouldn't like that, but might or might not be able to fire Powell. Trump already tried to fire Fed Board member Lisa Cook, and that didn't work out so well, so far (see above).
But there is another complication afoot here. Trump needs to pick a replacement for Powell as chairman starting May 15 and submit the nomination to the Senate for confirmation. Two Republican senators, Lisa Murkowski (AK) and Thom Tillis (NC), have accidentally discovered where they misplaced their spines and reinstalled them. They have announced that they will block the confirmation of all new Fed Board members until the DoJ drops the criminal investigation of Powell. Tillis is on the Senate Banking Committee, and his "no" vote would block the nomination from even coming to the floor for a vote. This is a direct challenge to Trump, something He. Does. Not. Like. Tillis is retiring from the Senate and Murkowski is not up for reelection until 2028. If Trump threatens her with a primary, then she could say: "I'm not afraid. Besides, you're old and sick will probably be dead by then, and Alaska has top-four-finisher elections anyhow." If he decided to punish Alaska, instead, Democratic Senate candidate Mary Peltola would be out with an ad in a day saying: "This is why we need Democratic control of the Senate, to block Trump."
Trump is making the politics of the Fed very strange. The ranking member of the Banking Committee, Sen. Elizabeth Warren (D-MA), bitterly opposed Powell's initial nomination as chairman, saying he was a dangerous man who failed to oversee the big banks. Now she is vigorously defending Powell—or, more accurately, she is opposing the DoJ charging Powell with a criminal offense on a made-up charge.
But even if Trump orders the DoJ to drop the charges against Powell and finds a nominee who can get past the Senate, he still may not get what he wants (namely, lower interest rates, which are good for his real estate business). Interest rate decisions are made by the 12-member Federal Open Market Committee, in which the chairman has just one vote, like all the others. Recent decisions have been split, such as the 9-3 decision in December to cut rates just 0.25%, much less than Trump wanted. If Trump's new chair wants to lower rates dramatically, but is outvoted by the 11 others who are worried about inflation, Trump may try to fire the new chair for not giving him the result he wants. This will lead to more court cases and probably spook the markets. Claudia Sahm, a former Fed research director, said: "We could be on the verge of a revolving door of Trump Fed Chairs, each less credible and less effective than the last." (V)