US Federal Reserve Chair Powell says will not resign if asked by Trump
Federal Reserve Board Federal Reserve Chairman Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington, U.S., Nov. 07, 2024. (AFP Photo)
Federal Reserve Chair Jerome Powell stated Thursday he would not resign if asked to do so by President-elect Donald Trump. Speaking after announcing a 25 basis point interest rate cut, Powell noted that his term as Fed chair extends until 2026 and stressed that firing any of the seven Fed governors was “not permitted under the law.”
“We don’t guess, we don’t speculate, and we don’t assume,” Powell told reporters when asked about the potential impact of Trump’s election victory on monetary policy.
He assured that the election would have no immediate effect on the Fed’s decisions, as there is still uncertainty regarding Trump’s future economic agenda.
His comments underscore the delicate balancing act policymakers may have to play in the next Trump administration, given the US president-elect’s recent criticism of the Fed.
On the campaign trail, Trump repeatedly accused Powell — whom he first appointed to run the US central bank — of working to favor the Democrats, and has suggested he would look to replace him once his term as Fed Chair ends.
Fed cuts interest rate by 25 basis points for 2nd consecutive drop
The Fed’s quarter-point rate cut lowers its key lending rate to between 4.50% and 4.75%, aiming to ease the costs of mortgages and loans, a relief to consumers who have raised concerns about the cost of living.
However, Powell cautioned that the long-term cost of borrowing would depend on market reactions to Trump’s economic policies and how interest rates would need to adjust to keep inflation in check.
While Trump’s victory signals significant political change, much depends on whether Republicans maintain control of both houses of Congress.
Economists like former St. Louis Fed President Jim Bullard expressed concerns about fiscal discipline, which has eroded under both political parties.
