By The Opinion
07 Nov 2024, 19:15 PM EST
Federal Reserve (Fed) Chairman Jerome Powell said he would not resign from his position even when Donald Trump himself asked him to, despite the fact that the same Republican nominated him for the position he holds today in 2017.
Powell’s message comes after the Fed’s decision this Thursday to reduce interest rates by a quarter of a percentage point.
Powell explained that he was not legally required to leave if asked, and that his staff had determined that the president lacked the ability under the law to demote, at will, himself or any other Fed governor.
Powell’s term is scheduled to end in May 2026.
Powell made the comments during his regular speech following the release of the Federal Open Market Committee’s latest statement on interest rate policy. The committee announced a quarter-point cut, a widely expected move.
Furthermore, his comments follow the re-election this week of Trump, who has a history of publicly criticizing the Fed chair and already explored the possibility of firing Powell during his first term in the White House.
Trump has also promised to implement more aggressive tariffs, take extreme measures against migrants and extend tax cuts.policies that could put upward pressure on prices and long-term interest rates and lead the Fed to scale back rate cuts.
According to unofficial reports, leaked by CNN, Trump would likely allow Powell to complete the remainder of his term, citing sources familiar with the matter.
The Fed is the central bank of the United States and is in charge of guarding part of the reserves of the American member banks: the federal ones, and the voluntarily associated state banks.
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