In a press conference on Thursday, US Federal Reserve Chair Jerome Powell firmly responded to questions regarding whether he would resign if President-elect Trump requested it. Powell, whose term as chair runs through 2026, responded with a straightforward No. When asked if he would be legally obligated to step down, Powell reiterated, No.
Jerome Powell went on to clarify that it is not permitted under the law for the president to fire or demote him or any other Fed governors with leadership positions. Although Trump appointed Powell as Fed chair during his first term in 2017, the former president often publicly criticized Powell and the US Federal Reserve for not cutting interest rates swiftly enough. In 2019, Powell had similarly stated that he would not resign if Trump requested it.
In 2021, President Biden reappointed Jerome Powell, despite some objections from progressive voices. These critics argued that Powell’s policies, especially the maintenance of relatively high interest rates, have had adverse effects on the average American consumer.
Earlier this year, Trump suggested that Powell, who is a lifelong Republican, might act politically by cutting rates ahead of the 2024 election in favor of Democrats. Although the US Federal Reserve did implement a significant rate cut of 50 basis points in September, Trump defeated Vice President Harris in this week’s election, putting this speculation to rest.
As an independent agency, the US Federal Reserve maintains a strong stance on its autonomy and neutrality, highly valuing its political independence. However, in August, Trump suggested that he should have at least a say in monetary policy decisions, including setting interest rates, as he believes his financial experience qualifies him to weigh in on such matters. In a later interview with Bloomberg, Trump stepped back from these comments, clarifying that while he thinks a president should be able to discuss interest rates, it doesn’t mean the Fed must listen.
Trump stated that while he believes he has strong instincts for financial matters, having a voice doesn’t mean he’s calling the shots. He added that he respects the Fed’s authority to make its own decisions but feels he should have a right to talk about it like anybody else.
Over the summer, Trump indicated he would allow Powell to finish his term, emphasizing that he would do so especially if I thought he was doing the right thing. However, he made it clear he would not plan to reappoint Powell for another term.
Jerome Powell’s stance underscores the US Federal Reserve’s independence as a vital element of its role in managing the U.S. economy. While a president can express opinions on economic policy, the Federal Reserve’s autonomy remains a cornerstone of its operations, ensuring that it operates without direct political influence, despite the voices and opinions of elected officials.
