Trump Will Not Fire Fed Chairman

U.S. President-elect Donald Trump has stopped criticizing and declared that he will not fire Federal Reserve Chairman Jerome Powell after taking office. US President-elect Donald Trump declared in a Sunday broadcast interview that he has no plans to replace Federal Reserve Chairman Jerome Powell when he takes office in January, Reuters reported. “No, I don’t think so. I don’t see that happening,” Trump replied on NBC News’ “Meet the Press with Kristen Welker” when asked if he intends to replace Powell, who will serve as Fed Chairman until May 2026. This is the first time since the election that Mr. Trump has expressed support for Mr. Powell. In July, he also stated that he would not dismiss the Fed Chairman if elected. Last month, a senior advisor to Mr. Trump emphasized that the President-elect is likely to have the Fed Chairman continue to complete the current term. Mr. Powell was appointed by Mr. Trump as the Chairman of the Fed in early 2018, replacing Ms. Janet Yellen, who later became the Secretary of the Treasury under President Joe Biden. However, the relationship between Mr. Trump and Powell quickly became tense as Mr. Trump frequently publicly criticized the Fed and Mr. Powell personally during his first term. At the end of 2018, Mr. Trump once considered dismissing Mr. Powell after the Fed raised interest rates, a move that displeased Mr. Trump. He also publicly opposed the Fed’s interest rate hike policy. During the early stages of the Covid pandemic in 2020, Mr. Trump continued to criticize Powell for a series of decisions that he believed were mistakes and claimed that he had the authority to remove the Chairman of the Fed. However, after the end of his first term, Mr. Powell was reappointed by President Joe Biden and has continued to serve his second term up to now. President Trump’s criticisms of the Fed during his first term broke the tradition of previous US presidents, who usually avoided direct intervention in the central bank, an institution designed to operate independently under congressional oversight. In this year’s election campaign, Mr. Trump pledged to reduce mortgage interest rates and other borrowing costs for the American people. This raises the possibility that he may continue to clash with Mr. Powell - as he did in his first term - over interest rate policy. In addition, President Trump’s promised simultaneous tariffs could pose challenges to the Fed’s efforts to control inflation. Previously, Mr. Powell had declared that he would refuse to resign early if Mr. Trump attempted to dismiss him, emphasizing that the removal of him or any member of the Federal Reserve Board before the end of their term was “not legally allowed”. According to CNBC, recently, Mr. Trump has continued to express the view that the president should have the power to participate in decisions on interest rates, which are the responsibility of the Fed. In an interview in October with Bloomberg News at the Economic Club of Chicago, he said, “I don’t think I should give orders, but I believe I have the right to express my opinion on whether interest rates should rise or fall”. Currently, investors expect the Fed to cut interest rates at the upcoming policy meeting on December 17-18, after recent data showed a cooling US labor market. A 0.25 percentage point interest rate cut will lower the Fed’s policy interest rate to about 4.25-4.5%, 1 percentage point lower than in September when the Fed began its easing cycle.