As Trump’s presidency approaches, Fed Chair Jerome Powell signals he won’t back down on protecting the central bank’s autonomy.
With the election results still rolling in, Federal Reserve Chair Jerome Powell has already made it clear that he intends to uphold the Fed’s independence, even if it means clashing with the new administration.
In a statement on Thursday, Powell declared he would not resign if President-elect Trump asked him to, asserting it would be illegal for any president to fire or demote a sitting Fed governor.
This stance comes amid signals from Trump’s team indicating they may seek influence over the Fed’s monetary policies, including interest rate decisions, challenging the longstanding norms that keep the Fed separate from politics.
Not stepping down
Powell’s terse response to questions on the issue emphasized his commitment: when asked if he would step down at Trump’s request, Powell replied simply, “No.” And when asked if the president could legally demote Fed governors, he affirmed, “not permitted under the law.”
Historically, Trump has shown impatience with Powell’s decisions, especially on interest rates.
If Trump tries to replace Powell or other Fed leaders prematurely, he could face legal challenges and market backlash.
Economists argue that an independent Fed actually benefits Trump’s agenda by stabilising rates.
