Carlos Barria/Reuters

Bloomberg reported on Tuesday that the White House legal counsel examined whether it was possible to strip Federal Reserve Chairman Jerome Powell of his position but keep him on the board of governors.

President Donald Trump has repeatedly lambasted the independent Fed, saying its policies have held back growth.

Bloomberg reported that Trump had discussed firing Powell in December, the last time the Federal Open Market Committee increased its benchmark interest rate.

The White House reportedly looked into demoting Federal Reserve Chairman Jerome Powell in February, a few months after the central bank last hiked interest rates.

Bloomberg reported on Tuesday that the White House legal counsel examined whether it was possible to strip Powell of his chairmanship but keep him on the Federal Reserve Board of Governors. President Donald Trump handpicked Powell to lead the central bank in 2017.

The White House economic adviser Larry Kudlow said on Tuesday that the administration was not taking action to change Powell's status. Asked for comment on the Bloomberg report, a different White House official said: "We're not going to comment on alleged conversations from 6 months ago that are not being pursued or considered."

Trump has repeatedly lambasted the Federal Reserve, saying its policies have held back growth. Ahead of the 2020 elections, he has increased pressure on the independent central bank to lower interest rates and sought to put political allies on its policymaking board.

In December, Bloomberg reported that Trump had discussed firing Powell shortly after the Federal Open Market Committee (FOMC) increased its benchmark interest rate to a target range of between 2.25% and 2.5%. But it was unclear whether that move would have been legal, and Powell has said he would not resign if the president asked him to.

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In addition to serving as the chairman of the board of governors, Powell also serves as leader of the FOMC and as a governor himself.

Under the Federal Reserve Act, a governor can be removed "for cause." While this isn't defined in the statute itself, courts have taken it to mean he would have to be guilty of negligence, malfeasance, or dereliction of duty.

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