President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017 in Washington, DC.
Drew Angerer | Getty Images
Federal Reserve Chairman Jerome Powell said Thursday that he will not step down if President-elect Donald Trump asks for his resignation.
When asked whether he would resign if asked by Trump, the Fed chair simply said: “No.” Powell subsequently told reporters that the president does not have the power to fire or demote him.
“Not permitted under the law,” Powell told reporters at a press conference, after the Fed cut interest rates by a quarter percentage point.
Investors will be closely watching the president-elect’s contentious relationship with the Fed chair. Trump appointed Powell in 2017, but repeatedly lashed out against the central bank chief during his first term as president, arguing Powell was not easing monetary policy quickly enough.
Trump said in an October interview that the president should be able to weigh in on interest rate decisions.
“I don’t think I should be allowed to order it, but I think I have the right to put in comments as to whether the interest rates should go up or down,” Trump told Bloomberg News at the Chicago Economic Club Oct. 15.
As Covid-19 swept the nation in March 2020, Trump claimed the authority to remove Powell from office. The Fed chair’s term ends in 2026.
Powell also said Thursday that Trump’s election victory this week will not have any immediate impact on the central bank’s policy.
“In the near term, the election will have no effects on our policy decisions,” Powell told reporters.
The Republican Party also won a majority in the Senate. If the GOP takes the House of Representatives, Trump should have an easier path to pass his economic agenda.
Steve Mnuchin, Trump’s former Treasury Secretary, said the president-elect will likely focus on cutting taxes and imposing tariffs.
Powell said the next administration’s policies could have an economic effect that would impact the Fed’s dual mandate of maximum employment and price stability. But it is still too early to tell and the Fed is not making any assumptions, Powell said.
“It’s such an early stage,” Powell said. “We don’t know what the policies are, and once we know what they are, we won’t have a sense of when they’ll be implemented,” he said.