U.S. Rep. Earl Carter (R-GA) introduced legislation that would give the president the power to fire the Chair of the Federal Reserve.
The bill is called the Timely Oversight of Operations, Liquidity, Accountability, Targeting, and Effectiveness (TOO LATE) Act. The TOO LATE moniker is in reference to the nickname that President Donald Trump has given Fed Chair Jerome Powell for, in his opinion, being too late to cut the federal funds interest rate.
According to the text of the bill, the president could remove the Chairman of the Board if, for two consecutive quarters, the federal funds target rate deviates by more than 200 basis points from the average generated by any two of the following benchmarks during such quarters:
- The Implicit Price Deflator for Personal Consumption Expenditures;
- The difference between the yield of a 5-year Treasury bond and the yield of a 5-year Treasury Inflation-Protected Security;
- The difference between estimates of unemployment of the Board and the relative to the projections of the Congressional Budget Office.
Carter said that the current law is ambiguous, stipulating that the president may fire the Chair of the Federal Reserve “for cause.” Carter said some legal scholars have interpreted for cause to mean malfeasance, neglect of duty, or inefficiency. This bill will explicitly broaden the scope of reasons a president may fire the Chair of the Federal Reserve.
“Federal Reserve Chair Jerome Powell needs to go, and the President should have the power to make that decision without question. Powell has been too late to cut rates, and it is directly harming the American people,” carter said. “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.”
In a social media post, Trump again urged Powell to lower rates. Trump also said he is considering allowing a lawsuit against Powell related to managing the construction of the Fed Buildings.