Trump and the Federal Reserve are barreling toward a massive clash: analysis

President Donald Trump and the Federal Reserve appear to be on a new collision course, according to a new analysis.

Andrew Ackerman, who reports on the Federal Reserve for the Washington Post, wrote in a new article on Tuesday that Trump and the central bank could soon be at odds over who runs the bank after May 15, which is the day Chairman Jerome Powell's tenure ends. Powell has said he will stay at the central bank until a permanent replacement is found. Trump has nominated Kevin Warsh to replace Powell, but his nomination has stalled in the Senate.

Ackerman expects Trump to assert that the president has the right to determine the next Federal Reserve leader, not the central bank. That reading of the law sharply contradicts the central bank's understanding, according to Ackerman.

"A number of economists and Fed watchers aren’t so sure the White House will accept Powell continuing to serve as the acting Fed chief," Ackerman wrote. "They expect the administration to argue that the president, not the Fed, has the legal authority to elevate an acting chairman — a view that clashes directly with the Fed’s reading of the law."

"While any prolonged dispute over who runs the institution could add to market volatility at an already unsettled moment for the economy, it would be just the latest in the White House’s series of attacks on the Fed," he added. "Those broadsides include an effort to fire a sitting Fed governor, Lisa Cook, as well as a criminal probe into Powell related to testimony concerning a $2.5 billion office renovation. Cook and Powell deny wrongdoing."