CNN
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President-elect Donald Trump said in an interview that aired on Sunday that he has no plans to remove Federal Reserve Chair Jerome Powell.
Appearing on NBC’s “Meet the Press with Kristen Welker,” Trump was asked if he would try to replace Powell.
“No, I don’t think so. I don’t see it,” Trump said. “I think if I told him to, he would. But if I asked him to, he probably wouldn’t. But if I told him to, he would.”
Welker followed by asking Trump if he had plans to ask Powell to resign. Trump responded, “No, I don’t.”
The comments mark the first time since the presidential election that Trump has publicly backed Powell. In July, Trump said he would not fire Powell if he won the election and in November, a senior adviser to Trump reaffirmed that Trump would likely allow Powell would finish his term as chairman.
Trump, however, has threatened to remove Powell from his post on several occasions after the central bank raised interest rates in 2018 and even called Powell “the enemy” in 2019. In March 2020, Trump told reporters he had the “right to remove (Powell) as chairman” and that “he has, so far, made a lot of bad decisions, in my opinion,” after markets tanked amid the pandemic. But he also praised Powell for cutting rates to zero to prevent an economic collapse.
Trump nominated Powell to serve as head of the US central bank in November 2017. Powell was later reappointed by President Joe Biden to serve another term.
Barely 48 hours passed after Trump’s election before a reporter asked Powell if he’d resign if Trump asked him to. Powell responded that he would not.
“Not permitted under the law,” Powell repeated twice.
There are legal barriers for Trump, and any other president, to remove or fire a Fed chair. It requires what America’s central bank refers to as “for cause.”
Ultimately, the Supreme Court could have the final say on what merits a “for cause” firing of a Fed chair. But while that fight, which would probably be lengthy, plays out, Powell would likely still get to stay in his job until his term ends.
Trump had accused Powell of being “political,” and said that the Fed has considered rate cuts “for the sake of maybe getting people elected” in a February interview with Fox Business Network’s Maria Bartiromo.
Trump has also said that his threats to remove Powell were because interest rates were too high, but the Fed chair went too far by cutting rates “too much.”
Trump has also shared another plan if he can’t fire Powell: getting the central bank to consult him on interest rate decisions.
“I feel the president should have at least a say in there. I feel that strongly,” Trump said at a news conference in August about the Fed’s interest rate decisions. “I made a lot of money. I was very successful. And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve — or the chairman.”
The Fed is intended to be an independent governing body free from political influence so that it doesn’t make decisions that could upset the scale of job creation and low inflation.
It’s unclear whether Trump would need congressional approval to take away the Fed’s independence. Either way, Powell is against the idea, and told reporters in September that independent central banks typically have lower inflation.
“It’s a good institutional arrangement, which has been good for the public, and I hope and strongly believe that it will continue,” he said.
