Michael Barr, Vice Chairman of the U.S. Federal Reserve (Fed), confirmed his intention not to step down even if President-elect Donald Trump demands his resignation, just like Chairman Jerome Powell.
Barr, who is in charge of financial supervision, appeared before the House Financial Services Committee on the 20th (local time) and responded to a question about what he would do if President-elect Trump tried to dismiss him by saying, "As Chairman Powell said, we serve fixed terms," adding, "I too will serve the term assigned to me." Barr, who was nominated by Democratic President Joe Biden, has a term until July 2026, while Chairman Powell's term lasts until May 2026.
This statement came amid concerns that the independence of the central bank could be shaken following President-elect Trump's victory, who has argued that the president should be able to intervene in the Fed's monetary policy. Earlier, Chairman Powell also dismissed questions about whether he would resign if President-elect Trump demanded it, saying, "I will not." Vice Chairman Barr's remarks on this day align with Chairman Powell's stance. The Fed Board of Governors consists of one chairman, two vice chairmen, and four governors.
In particular, Barr served as Deputy Assistant Secretary of the Treasury under the Obama administration, and since he was nominated by Biden, who is a political opponent of President-elect Trump, The Washington Post (WP) predicted that an immediate dismissal attempt could be made with the inauguration of the next administration. The Fed's financial supervision vice chairmanship is a position with significant influence over the U.S. banking system. Given President-elect Trump's emphasis on deregulation and pro-cryptocurrency policies, it is expected that he would want to place loyalists in this position. Barr has consistently advocated for cryptocurrency regulation and has expressed ongoing concerns regarding the handling of cryptocurrencies by the banking sector.
Local media pointed out that it is unclear whether President-elect Trump has the legal authority to dismiss members of the Fed Board. This depends on the interpretation of Section 10 of the Federal Reserve Act. The law guarantees the term of each board member "unless the president removes them for cause," but controversy is expected over the extent of what constitutes "cause." Powell, who is a lawyer, previously argued that the U.S. president does not have the legal authority to dismiss or demote himself or other Fed board members.
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