Federal Reserve Chair Jerome Powell said Thursday that he would not resign his job, even if President-elect Donald Trump asked him to.
"Some of the president-elect's advisers have suggested that you should resign. If he asked to leave, would you go?" Politico reporter Victoria Guida asked Powell at a news conference, after the governing board of the central bank voted to lower interest rates by a quarter of a percentage point as inflation continues to wane and fears of a slowing job market rise.
Powell replied with a terse, “No,” later adding that Trump is “[n]ot permitted under the law” to fire him.
Trump, who first appointed Powell to the job, has warred with Powell in the past.
In September, after the Fed announced a rate cut, Trump accused Powell of “playing politics”—fearing that a better economy would have hurt his chances in the 2024 election.
When Trump was in office, he also criticized Powell because he didn't want the central bank to raise interest rates, which is one of the bank's key roles in protecting the U.S. economy.
In 2018, shortly after Trump appointed Powell, he mused about firing Powell. But his administration decided against making that move, realizing that Trump didn’t have the authority to do so.
In the 2024 campaign, Trump has said that he wants to do away with the Fed's independence, believing he knows better than the Fed itself about how to control the economy.
“I feel the president should have at least a say in there. I feel that strongly,” Trump said at an August press conference of the Fed's interest-rate decisions. “I made a lot of money. I was very successful. And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve—or the chairman.”
Trump reportedly said he wouldn't fire Powell, whose term expires in May 2026.
However, Trump will be able to appoint Powell’s successor. And it’s possible he’ll choose someone who will do Trump’s bidding, rather than retain the bank’s independence. If Trump convinces a future Fed chair to lower interest rates too soon or by too much, it could cause inflation to once again skyrocket.
In fact, Bloomberg News’ editorial board warned about this ahead of the 2024 election, writing:
A second Donald Trump presidency poses grave dangers for the U.S. Weighed against the chances of exploding public debt, the collapse of global trade and the erosion of democratic norms, the risk that he’d attack the Federal Reserve’s independence might seem trifling. It isn’t. An effective central bank is indispensable for economic stability—and a politically subordinate central bank cannot be effective.
Bloomberg’s editorial board added, “Trump, blissfully unaware of the risk his posturing poses for the economy, thinks he knows better. Voters, hardened to his excesses, need to wise up. They dismiss this prospect at their peril.”
Unfortunately, voters did dismiss that prospect, electing Trump on Tuesday.
If he chips away at the Fed’s independence and forces it to change monetary policy in a way that spikes inflation, voters will have only themselves to blame.
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