Trump expresses no intentions of displacing Federal Reserve chairman Jerome Powell
Trump expresses no intentions of displacing Federal Reserve chairman Jerome Powell
Appearing on NBC's "Meet the Press with Kristen Welker," Trump was queried if he would attempt to replace Powell.
"Nah, I don't think so. I don't see it happening," Trump responded. "If I told him to, he would. But if I asked him to, he probably wouldn't. But if I told him to, he would."
Welker then asked Trump if he had plans to ask Powell to step down. Trump replied, "Nope, I don't."
This is the first time since the presidential election that Trump has publicly supported Powell. In July, Trump stated that he wouldn't dismiss Powell if he won the election, and in November, a senior advisor to Trump confirmed that Trump was likely to let Powell complete his term as chairman.
However, Trump has threatened to remove Powell from his position multiple times after the central bank increased interest rates in 2018. In 2019, Trump even labeled Powell as "the enemy." In March 2020, Trump told reporters that he had the authority to remove Powell as chairman and that "he's made some bad decisions, in my opinion," after markets plummeted due to the pandemic. But he also praised Powell for reducing rates to zero to prevent an economic collapse.
Trump appointed Powell to lead the US central bank in November 2017. Powell was later reappointed by President Joe Biden to serve another term.
'Against the law'
Just 48 hours after Trump's election, a reporter asked Powell if he would resign if Trump asked him to. Powell responded, "Nope, that's not allowed under the law."
Legal obstacles prevent Trump, and any other president, from removing or firing a Fed chair. This requirement, referred to as "for cause," can only be met under specific circumstances.
Ultimately, the Supreme Court would have the final say on what constitutes "for cause" for firing a Fed chair. But while this legal battle unfolds, Powell would likely remain in his position until his term ends.
Trump seeks input on interest rates
Trump accused Powell of being "political," stating that the Fed had considered rate cuts for "the sake of maybe getting people elected" in a February interview with Fox Business Network's Maria Bartiromo.
Trump has also claimed that his threats to remove Powell were due to interest rates being too high, but Powell went too far by reducing rates "too much."
Trump has proposed another strategy if he can't dismiss Powell: getting the central bank to consult him on interest rate decisions.
"I believe the president should at least have a say in this," Trump said during a news conference in August about the Fed's interest rate decisions. "I've made a lot of money. I've been successful. And I think I have a better instinct than, in many cases, people who would be on the Federal Reserve — or the chairman."
The Fed is intended to be an independent governing body that avoids political influence, ensuring it doesn't make decisions that could hinder job creation and low inflation.
It's unclear whether Trump would require congressional approval to negate the Fed's independence. Regardless, Powell is against the idea, stating in September that independent central banks typically have lower inflation rates.
“It’s a good institutional arrangement, which has benefited the public, and I hope and strongly believe that it will continue,” he said.
CNN's Elisabeth Buchwald, Bryan Mena, and Kayla Tausche contributed to this report.
Despite Trump's threats to remove Powell in the past, he stated during his appearance on NBC that he has no plans to ask Powell to step down from his role as chairman of the Federal Reserve. According to legal obstacles, a president such as Trump cannot remove a Fed chair without specific circumstances referred to as "for cause."