President-elect Donald Trump has expressed that he does not intend to remove Federal Reserve Chairman Jerome Powell, despite his previous threats to do so. In an interview on NBC’s Meet the Press with Kristen Welker, Trump was asked if he planned to ask Powell to resign or replace him, to which he responded, “No, I don’t think so. I don’t see it.”
This marks the first time since the election that Trump has publicly supported Powell. Trump had previously criticized Powell, especially after the central bank raised interest rates in 2018, and referred to Powell as “the enemy” in 2019. Trump’s administration had even considered replacing Powell, particularly when markets suffered in the early stages of the COVID-19 pandemic. Despite these tensions, Trump acknowledged Powell’s role in helping the economy during the crisis by slashing interest rates.
Powell, appointed by Trump in 2017, was later reappointed by President Joe Biden for another term. While Trump’s comments suggest he will not attempt to remove Powell, legal barriers exist. The Federal Reserve Chairman can only be removed for cause, a standard that is difficult to meet, according to Powell himself. Powell has firmly stated that resignation upon request is “not permitted under the law.”
Despite these limitations, Trump has previously expressed frustration with Powell’s interest rate decisions and his belief that the President should have more influence over the Fed’s policies. Trump has argued that his success in business gives him a better instinct on economic matters than those at the Fed.
Although Trump’s influence over the Fed is limited, especially in terms of its independence, his comments indicate a continued interest in shaping the nation’s economic policies through other means, including possibly consulting on interest rate decisions in the future.
