Larry Kudlow: Can Fed Chair Jerome Powell Survive Calls for Resignation?

Growing Pressure on Fed Chair Powell

• 💡 Reports suggest Jerome Powell is facing pressure to resign from his position as Federal Reserve Chair.
• 🎯 President Trump has been vocal, criticizing Powell for not lowering interest rates in line with low inflation.

Criticism from Housing Finance Agency Head

• 📌 William Py, head of the Federal Housing Finance Agency, issued a statement expressing encouragement over reports of Powell considering resignation, calling it the 'right decision for America.'
• ⚡ Py believes Powell's resignation would lead to an economic boom.

Accusations of Mismanagement

• 🧠 OM Director Russ Vote criticized Powell for being 'too late' to recognize inflation and 'too late' to lower rates, citing mismanagement of the institution.
• ⚠️ Vote highlighted the Fed operating at losses for years and pointed to the massive cost overruns and budget discrepancies in the construction of the Fed's new building, a project he described as a 'Palace of Versailles.'
• 💰 The new building project is reportedly over budget by $700 million, with a total cost upwards of $2.5 billion.

Potential Grounds for Removal

• ⚖️ Powell's claim that he can only be replaced 'for cause' is being challenged by the alleged financial mismanagement of the Fed's building projects.
• 🧐 This mismanagement, if proven to be denied under oath, could constitute sufficient cause for his resignation or termination by President Trump.

Financial Health of the Fed

• 📊 Economists note the Fed is 'hemorrhaging cash,' with interest expenses exceeding interest income.
• 📉 The Fed's $6 trillion-plus bond portfolio is reportedly 'underwater' by $1.1 trillion.
• ⚠️ This situation is compared to the bankruptcy of Silicon Valley Bank, which nearly destabilized the financial system.