Federal Reserve Chairman Jerome Powell was asked if he would resign if President-elect Donald Trump told him to do so. His answer is a simple “no.”
Chairman Powell spoke at a press conference after the US central bank cut interest rates for the second time in a row.
Trump has been a vocal critic of Powell during his presidential term from 2017 to 2021. He complained that the central bank is not lowering interest rates as much as he would like, even though his administration has implemented large corporate and income tax cuts to stimulate U.S. economic growth. .
Notably, President Trump himself appointed Janet Yellen as Fed Chair to replace her. President Joe Biden will retain Powell in office in 2021, and his current term ends in May 2026.
Trump will be sworn in as the new US president on January 20th after his stunning election victory over Kamala Harris. CNN reported Thursday that Powell is likely to be allowed to serve the remainder of his term.
Although Trump could change his mind, the current view of him and his economic team is that Powell should remain at the top of the central bank until his term expires in May 2026, according to CNN. This was reported as a story from an advisor.
Powell said “the law does not allow the president” to fire the Fed chairman. He also declined to answer questions about concerns that the president would infringe on the Fed’s political independence.
In a separate response, Powell said that in the short term, the outcome of the U.S. presidential election “will have no impact” on the Fed’s decisions. “We do not know the timing or content of future economic policy changes,” he said, adding that the central bank would not speculate or assume what would happen.
President Trump has promised to lower corporate taxes while raising tariffs on all imports into the country, with the former expected to bring economic growth and the latter inflationary.
Regarding the likely scenario of stagflation, Chairman Powell said, “The plan is to avoid stagflation.What we do with interest rates will have a negative impact on either growth or prices.”
