Federal Reserve chair says Trump’s election win won't affect Fed policy, emphasizes independence
Federal Reserve Chair Jerome Powell affirmed that he will not resign if President-elect Donald Trump requests it, as reported by CNBC.
During a press conference following the Federal Reserve's decision to cut interest rates by a quarter percentage point, Powell responded to a question on whether he would step down at Trump’s request with a straightforward “No.”
He further clarified that the president lacks the legal authority to dismiss or demote him, stating, “Not permitted under the law.”
This response comes amidst a historically tense relationship between Powell and Trump.
Although Trump appointed Powell in 2017, he often criticized Powell's approach to monetary policy during his first term, expressing frustration over what he perceived as the Fed chair’s reluctance to ease policy aggressively.
In a recent October interview, Trump stated he believes he should have a say in interest rate decisions, though he stopped short of suggesting he should control them directly.
“I don’t think I should be allowed to order it, but I think I have the right to put in comments as to whether the interest rates should go up or down,” Trump remarked at the Economic Club of Chicago on October 15, as per Bloomberg News.
Powell emphasized that Trump’s election victory will not immediately impact the Federal Reserve’s current policies.
“In the near term, the election will have no effects on our policy decisions,” he told reporters, underscoring the Fed's intent to maintain an independent approach regardless of political shifts.
Additionally, with the Republican Party securing a majority in the Senate following the recent election, Trump may face fewer obstacles in advancing his economic agenda, particularly if the GOP gains control of the House of Representatives.
Steve Mnuchin, Trump’s former Treasury secretary, suggested that the president-elect is likely to prioritize tax cuts and the imposition of tariffs, particularly targeting China.
Powell also acknowledged that future policy directions under the new administration could eventually influence the Federal Reserve’s dual mandate of maximum employment and price stability.
However, he stressed that it is “such an early stage” to predict any specific impacts.
“We don’t know what the policies are, and once we know what they are, we won’t have a sense of when they’ll be implemented,” Powell noted, highlighting the Fed’s commitment to remaining cautious and data-driven in its approach.
