U.S. President-elect Donald Trump stated in an interview on NBC’s Meet the Press that he does not plan to replace Federal Reserve Chair Jerome Powell in January, despite their rocky history during Trump’s first term. Powell’s current term as chair runs until 2026.
- Powell’s Tenure Secure (For Now): Trump said, “No, I don’t think so. I don’t see it,” when asked about removing Powell. He added that Powell might not willingly step down if asked.
- Past Clashes: Trump criticized Powell during his first term for raising interest rates and even considered dismissing him in 2018. He argued Powell’s decisions hindered economic growth and later criticized his handling of the COVID-19 pandemic.
- Legal Independence of the Fed: Powell has affirmed he would not leave early if asked, citing legal protections for the Federal Reserve’s independence. The Fed operates with autonomy under Congressional oversight.
- Economic Policy Tensions: Trump’s campaign pledge to lower borrowing costs could lead to friction with Powell’s policy decisions, especially as the Fed manages inflation. Additionally, Trump’s proposed tariffs may complicate the Fed’s efforts to stabilize prices.
- Upcoming Rate Cut: Markets anticipate the Fed will reduce rates by 0.25% at its Dec. 17-18 meeting, potentially lowering the target range to 4.25%-4.50%. This would mark continued easing after September’s rate cuts.
Trump’s comments suggest he may avoid direct interference in Powell’s role, but their historically contentious relationship could resurface if disagreements over monetary policy arise.
