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Speaker 1: This is a breaking news update from Bloomberg instant reaction

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Speaker 1: and analysis from our three thousand journalists and analysts around

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Speaker 1: the world.

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Speaker 2: President Donald Trump is likely to fire Federal Reserve Chair

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Speaker 2: Dromepouse soon. A White House official set and discussed the

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Speaker 2: possibility in a meeting with Congressional Republicans on Tuesday night.

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Speaker 2: While the lawmakers voice support for the move, which for

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Speaker 2: likely royal financial markets that lead to a consequential legal showdown,

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Speaker 2: Trump has not made a final decision and could change

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Speaker 2: his mind, according to if He'shery, who requested anonymity to

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Speaker 2: discuss a private conversation. To get more on this, we

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Speaker 2: go to Chris Condon, Bloomberg Federal Reserve Team leader. Chris,

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Speaker 2: has this happened before? Has a president ever removed a

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Speaker 2: FED chief?

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Speaker 3: No?

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Speaker 1: Absolutely, not. Closest thing to this was in the nineteen

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Speaker 1: seventies Jimmy Carter didn't like his FED chief, and so

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Speaker 1: he gave him the job as Treasury Secretary, which is

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Speaker 1: not exactly firing somebody. So no, we have not come

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Speaker 1: anywhere really close to anything like this.

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Speaker 3: And Chris, now, this was announcering a meeting with Congressional

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Speaker 3: Republicans and the lawmakers actually voice support for this move.

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Speaker 3: Did that surprise you at all?

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Speaker 1: Well, it depends, you know, which Republicans are we talking about.

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Speaker 1: If you have a small group of Republicans, you could

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Speaker 1: probably find a small group of Republicans that would be

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Speaker 1: adamantly opposed to this. You could also easily find a

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Speaker 1: small group of Republicans that are gung ho for this.

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Speaker 1: So it depends on who these folks are exactly. But

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Speaker 1: you know, it is still meaningful that you had some

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Speaker 1: gathering of GOP lawmakers and there wasn't anybody pushing back

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Speaker 1: at least that we know of, So yeah, they could.

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Speaker 1: It is quite meaningful.

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Speaker 2: Hey, Christian, I think you know one of the this

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Speaker 2: isn't easy to do. That's maybe one of the reasons

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Speaker 2: why it's never been done before. Talking about this is

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Speaker 2: not an easy thing to do, as Section ten of

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Speaker 2: the Federal Reserve Act requires quote cause for removal. Tell

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Speaker 2: us about Section ten and how that can be used, right.

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Speaker 1: Okay, So importantly, this language has been tested in the

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Speaker 1: courts for decades and decades, going back to the nineteen thirties, really,

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Speaker 1: and the courts have examined what lawmakers meant by these words,

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Speaker 1: when they put it in the Federal Reserve Act and

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Speaker 1: in other laws establishing other federal agencies. It's a pretty

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Speaker 1: high hurdle. Now, it should be said that hurdle is

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Speaker 1: potentially going to be lowered by the Supreme Court for

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Speaker 1: other federal agencies. Trump has moved to fire some FCC commissioners,

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Speaker 1: and the Supreme Court is hearing that case, and there's

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Speaker 1: a lot of speculation that they will allow Trump to

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Speaker 1: do that. But the Court very importantly has already been

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Speaker 1: in the preliminary ruling signaled that they are likely to

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Speaker 1: treat the FED differently, saying it has unique historical qualities

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Speaker 1: as a public private institution. Legal scholars have interpreted that

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Speaker 1: as a sign that the Supreme Court will protect and

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Speaker 1: keep this four cause hurdle in place for FED governors.

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Speaker 1: So if Trump wants to remove Howell from the FED

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Speaker 1: all together, he will have to show cause. Now, historically

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Speaker 1: that's meant inefficiency, neglective duty, or malfeasans according to the

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Speaker 1: legal experts. And that's not just you know, missing a

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Speaker 1: few dollars here and there. This is real neglective duty,

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Speaker 1: real incompetence fraud. It's considered a high legal hurdle, So

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Speaker 1: he would still have quite a fight in front of

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Speaker 1: him if he wants to remove Powell from the FED.

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Speaker 3: Yeah, so that's the least of my question. Is this

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Speaker 3: more about interest rates or is this more you know,

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Speaker 3: President Trump also talked about renovations over at the Central Banks.

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Speaker 3: I mean, what's the leading factor behind this decision?

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Speaker 1: Right? Okay? So interestingly, I'd point out a couple of

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Speaker 1: things here. Powell's term as chair ends in May of

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Speaker 1: twenty twenty six, and he has in some recent he's

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Speaker 1: been questioned will he leave as most chairs do because

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Speaker 1: he doesn't have to leave, he can stay on as

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Speaker 1: a governor, and he has declined to answer that question.

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Speaker 1: It is since he's done that that administration officials have

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Speaker 1: begun to apparently look for other reasons that could satisfy

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Speaker 1: this for cause hurdle, And they brought up this the

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Speaker 1: rehabilitation of two big buildings at the FED controls its

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Speaker 1: headquarters in downtown Washington, which are undergoing a very expensive renovation,

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Speaker 1: and they're trying to grab onto this as a cause. Now,

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Speaker 1: many people have viewed this as trying to find find

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Speaker 1: some excuse to fire Powell, when in fact, the real

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Speaker 1: beef they have is interest rates. That's what Trump has

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Speaker 1: focused on constantly since being re elected. You hear him

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Speaker 1: almost every day asking for the FED or demanding the

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Speaker 1: FED lower rates. So yeah, a lot of people are

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Speaker 1: saying that's really the center of the conflict, and he's

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Speaker 1: using this other issue as the stick to beat the power.

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Speaker 2: Over Chris Timing, this is all new to everyone. If

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Speaker 2: President Trump were to remove FED chair, pal would mister

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Speaker 2: palell then I guess Sue is a private citizen or

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Speaker 2: how who would file suit against it?

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Speaker 1: He would? He would as the party that is harmed.

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Speaker 1: He would have to sue personally. It would be a

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Speaker 1: big deal. It would be expensive. Although he's a fairly

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Speaker 1: wealthy fellow, and he has given indication that he that

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Speaker 1: he would fight. I think we can expect that. One

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Speaker 1: other thing to note. I think that's very important to

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Speaker 1: add though, Even if Powell were successfully removed, the Federal

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Speaker 1: Open Market Committee sets interest rates, not the chair, so

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Speaker 1: it would not mean that a new person in charge

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Speaker 1: would suddenly be able to change the direction of interestory

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Speaker 1: policy at the FED.

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Speaker 3: There were a couple names tossed around you, Kevin Hasid,

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Speaker 3: Kevin Walsh, Christopher Waller. How would you describe the difference

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Speaker 3: between them.

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Speaker 1: The big difference is between all of the other candidates

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Speaker 1: and Christopher Waller. Waller is a sitting Fed governor. He

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Speaker 1: is a Trump appointee, but he's pretty widely viewed as

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Speaker 1: somebody who will follow his instincts as a very experienced economist.

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Speaker 1: He is at the dubbish end of the spectrum at

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Speaker 1: the moment. On the FOMC, he has suggested that he'd

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Speaker 1: be ready to cut possibly this month. There's some speculation

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Speaker 1: of to what extent he's, you know, auditioning for the job.

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Speaker 1: The others, though, are much more clearly considered loyalists to Trump,

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Speaker 1: especially Kevin Hassett. Kevin wartsh perhaps less so, but he's

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Speaker 1: been pursuing that job for a very long time, and

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Speaker 1: while historically a Hawk, he has been talking very dubbishly,

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Speaker 1: lovely