#USFed, #Fed, #DonaldTrump, #JeromePowell
Washington, D.C./IBNS-CMEDIA: US Federal Reserve Chair Jerome Powell stated on Thursday (Nov. 7) that he would not step down early if President-elect Donald Trump attempted to remove him from office, clarifying that he is legally protected from such removal.
Speaking at a press conference after the Federal Open Market Committee’s recent meeting, Powell was asked if he would consider leaving his role if Trump requested it, given Trump’s previous criticism during his first term.
Powell firmly responded, “no,” and explained that the law does not allow for a Fed chair or any Fed governor to be dismissed before the end of their appointed term.
Following expectations, the Fed cut its target interest rate range by a quarter percentage point to between 4.5 percent and 4.75 percent, in line with its efforts to adjust monetary policy amid easing inflation pressures.
With the US elections approaching on Tuesday, analysts had widely anticipated further rate cuts.
Powell also dismissed questions about the potential influence of Trump’s policies on Fed decisions, emphasizing, “In the near-term the election will have no effects on our policy decisions. We don’t guess, speculate and we don’t assume what the broader government might do.”
CNN reported earlier on Thursday that a Trump advisor indicated the president-elect would allow Powell to serve out his term, which ends in May 2026, though Powell’s term as a Fed governor extends to January 2028.
According to CNN, Trump is considering former Fed Governor Kevin Warsh and former administration chief economist Kevin Hassett as possible successors when Powell’s term ends.
Fed leadership is protected by law from removal based on political pressure, ensuring they can serve their full terms.
Trump originally appointed Powell as Fed chair in 2018, succeeding Janet Yellen, who later became President Joe Biden’s Treasury Secretary.
While Biden reappointed Powell, Trump’s relationship with Powell soured over disagreements on policy, with Trump frequently criticizing the Fed, breaking with a longstanding presidential tradition of refraining from direct criticism of the central bank.
Any attempt by Trump to remove a Fed chair would likely disrupt financial markets and could heighten concerns over inflation.
Additionally, Trump’s policies, which reportedly may include extensive trade tariffs and large-scale deportations, could reignite inflationary pressures that the Fed has managed to cool.
If that happens, the Fed might be forced to raise rates instead of lowering them as initially expected, potentially putting the Fed and Trump at odds.
For now, however, the Fed’s policy framework provides some insulation from political pressure.
“President-elect Trump is likely to pressure the Fed to cut interest rates more aggressively like he did during his first term, but at least over the next year it will have little effect on the trajectory of interest rates since the Fed system is structured to insulate rate decisions from pressure from the White House,” noted Bill Adams, chief economist for Comerica Bank.
