Federal Reserve Chair Jerome Powell reaffirmed his commitment to protecting the central bank from political interference following Donald Trump’s re-election. During a press conference on Thursday, Powell made it clear that he would not step down if asked by Trump, emphasizing that the president does not have the legal authority to dismiss him or other senior Federal Reserve leaders.
In response to a direct question about whether he would resign if requested by Trump, Powell firmly replied, “No.” He went on to explain that despite past discussions by Trump to fire him during his first term, the president lacks the power to remove or demote the chair or other senior Fed officials.
Peter Conti-Brown, a professor at the Wharton School and an expert on Federal Reserve history, remarked that Powell’s stance highlights the unified leadership at the Fed and suggests that while Trump may seek influence, changes won’t come until vacancies arise. Powell’s strong defense of the institution stood out as he largely avoided other politically charged questions, steering clear of speculating on the incoming administration’s policies.
Ian Katz, managing director at Capital Alpha Partners, noted that Powell’s refusal to consider stepping down underlines his belief in the Fed’s independence. “Quitting voluntarily due to presidential criticism would show that the Fed isn’t independent,” Katz said.
Trump’s re-election has raised the prospect of a power struggle between the White House and the central bank, particularly over interest-rate policies. Trump, who had appointed Powell to the chair in 2018, quickly turned on him, urging him to halt rate hikes later that year. Despite this tension, Powell has consistently emphasized the importance of the Fed’s independence and has expressed his intent to serve out his full term, which ends in 2026.
The Trump administration may also target Vice Chair for Supervision Michael Barr, the Fed’s top banking regulator. Senator Bill Hagerty, a possible candidate for Trump’s cabinet, hinted at the possibility of legal action to remove Barr, suggesting that “everything should be on the table.”
Any attempt to fire or demote Powell or other senior Fed figures would likely face legal challenges. While most legal scholars argue the president cannot dismiss the central bank chair, some suggest that there might be a legal path to demote the vice chair for supervision.
Meanwhile, the Fed announced its second consecutive quarter-point interest-rate cut on Thursday, with additional cuts expected in the months ahead. However, economic forecasts have been tempered by Trump’s election victory, as his policies — including tariffs and tax cuts — could push inflation and long-term interest rates higher. Powell emphasized that future rate decisions would depend on incoming data, leaving open the possibility of a pause at the December policy meeting.
Credit: BNNbloomberg (Text Excluding Headline)
