President-elect Donald Trump said in an interview aired Sunday that he does not intend to replace Federal Reserve Chairman Jerome Powell when he takes office in January.
“No, I don't think so. I don't understand that,” President Trump said on NBC News' “Interactions with the Press with Kristen Welker,” about Chairman Powell, whose term ends in 2026. When asked if he would seek his dismissal, he replied:
Trump added that he didn't think Powell, who has fought over interest rate levels in the past, would sit back and act.
“When I told him that, [go]he would. But even if I asked him, he probably wouldn't do it,” Trump told Welker.
Mr. Trump campaigned on a promise to lower mortgage rates and other borrowing costs for American households, raising the possibility that he would clash with Mr. Powell over interest rate policy, as he did during his first term. There is. President Trump's vow to impose across-the-board tariffs could complicate the Fed's efforts to curb inflation.
Powell said last month that he would refuse to leave office early if President Trump tried to remove him, arguing that it is “unauthorized by law” to fire him or any other Fed director before their terms expire.
In early 2018, President Trump nominated Powell, a former private equity executive and Republican, to chair the Fed, replacing Janet Yellen, who later became President Biden's Treasury secretary. Mr. Biden reappointed Mr. Powell to his current term.
But relations between Mr. Trump and Mr. Powell deteriorated, with Mr. Trump frequently attacking the Fed and its chief during his first term in office. Mr. Trump privately discussed firing Powell as chairman in late 2018, was upset by the Fed's move to raise interest rates, and publicly argued against raising them.
President Trump also criticized Powell in early 2020 at the start of the coronavirus pandemic, saying Powell had made some bad decisions and claiming he had the right to fire him. did.
Trump's attacks on the Fed during his first term marked a break from his decades-long avoidance of direct criticism of the central bank, which operates with legal independence and oversight from Congress.
President Trump said earlier this year that he felt he should have a say in the Fed's decisions, indicating he was interested in undermining the Fed's independence.
Traders expect the Fed to cut interest rates at its next policy meeting on Dec. 17-18 after recent data showed the labor market continues to cool. A quarter-point cut would put the Fed's policy rate in the range of 4.25% to 4.50%, 1 percentage point below where it was in September, when the central bank began its easing cycle.
