Trump-Powell battle would span three arenas where everyone loses

Bloomberg

Donald Trump says he likes winning. Right now, it’s difficult to count up anything but losers if the president fires Federal Reserve Chairman Jerome Powell.
Trump has been discussing whether he can dismiss Powell, Bloomberg News reported, pro-mpting Treasury Secretary Ste-ven Mnuchin to tweet that the president said he doesn’t believe he has the authority to do so. Trump himself has been publicly silent on Fed since the Bloomberg News report. If he decides to push ahead anyway, the president will be up against powerful forces that will likely deliver unwelcome verdicts in three principal arenas: the financial markets and economy, the US Senate and the courts. Here is how the might play out in each venue:

THE MARKETS AND ECONOMY
Firing Powell could undermine the US currency, leading to higher longer-term interest rates as foreign investors who are critical to financing America’s growing deficit balk, said Mark Spindel, the head of Potomac River Capital, a Washington investment fund. Anyone buying a house, or businesses attempting to finance capital spending, will pay the cost. Dollar volatility could infect the stock market, with investors further retreating from risk.
Trump has been simmering for months over Fed policy, claiming rising interest rates are putting a brake on his economic plans, though many companies have cited the trade war as
negatively impacting business.

THE SENATE
That gets to the second arena, which involves the Senate, which confirmed Powell and, together with the House, presides over the Federal Reserve Act.
It isn’t clear that the Senate would blithely accept Trump’s wishes and rubber stamp a new chairman. “The norm that you don’t fire a Fed Chair is as strong as they come,” said Peter Conti-Brown, a central bank historian at The University of Pennsylvania’s Wharton School.
Right now there is plenty of resistance among Senate Republicans on other Trump policies.

THE COURTS
The third arena involves legal battle over removal. Firing chairman just doesn’t look that easy from a legal perspective. The Federal Reserve Act stipulates that president can only remove a Fed governor — and Powell is also a governor — “for cause,” a reason that typically doesn’t cover policy differences. Powell’s Senate confirmation and fixed terms provide more protection; in other cases they’ve been interpreted by courts as limiting president’s authority to dismiss his own appointments in order to grant an agency independence.