- Reporters asked Fed Chair Powell whether he would resign if President-elect Trump asked him to.
- Powell responded with one word: “No.”
- Trump has been critical of Powell, but the law does not permit a president to fire a Fed official without cause.
Federal Reserve chair Jerome Powell has no plans to leave the central bank prematurely under President-elect Donald Trump.
On Thursday, the Federal Open Market Committee announced a 25-basis-point interest rate cut two days after Trump won the presidential election.
While economists expect Trump’s tariff proposals to boost inflation, Powell refused to comment on anything directly related to the election or politics during his Thursday press conference. However, when a reporter asked Powell if he would resign should Trump ask him to, the head of the central bank responded with one word: “No.”
When a different reporter later followed up with Powell on the topic and asked if the president has the power to fire or demote the head of the Fed, Powell responded: “Not permitted under the law.”
Trump has previously indicated that he would like to see changes in how the Fed functions. The Wall Street Journal reported in April that some members of Trump’s team were crafting a plan that would give the president-elect authority to oust Powell from his position before his term ends in 2026. The plan also included a path to give Trump a say in interest-rate decisions, jeopardizing the Fed’s independence.
Trump later walked back those comments in an August interview with Bloomberg, saying that he doesn’t need to be “calling the shot” but should be able to talk about interest-rate decisions. He also said that he would support Powell finishing his full term, “especially if I thought he was doing the right thing.”
The law only allows for a president to remove a Fed official if there is cause — policy disagreements, like the ones Trump has previously expressed, would not suffice. Trump said in February that Powell was being “political” by making decisions that could help Democrats win elections.
“It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected,” Trump said.
Powell has held firm that the Federal Reserve is not political, telling reporters on Thursday that “the election will have no effects on our policy decisions.”
“We don’t guess, we don’t speculate, and we don’t assume,” Powell said. “Just in principle, it’s possible that any administration’s policies, or policies put in place by Congress, could have economic effects that, over time, would matter for our pursuit of our dual mandate goals.”
