Trump gave an interview to NBC on Sunday, and when asked by the host whether he would try to replace Powell, he said he currently had no such plans. Trump gave an interview to NBC on Sunday, and when asked by the host whether he would try to replace Powell, he said he currently had no such plans.
The new U.S. President Trump has sparked increasing discussions about whether he will intervene in the Federal Reserve's decisions due to his promises to massively deport immigrants, impose comprehensive tariffs, and cut taxes after taking office. In early November, Federal Reserve Chairman Powell stated at a press conference after a meeting that the election results would not have a short-term impact on U.S. monetary policy.
The Federal Reserve Chairman Powell stated at a press conference after the meeting that the election results would not have a short-term impact on U.S. monetary policy. When asked at the press conference, 'If Trump asks him to resign, would he resign?' he stated that he would not resign, because under the law, the president does not have the power to remove a Federal Reserve Chairman who has been confirmed by the Senate due to policy disagreements.
Powell stated that the current economic outlook is robust, and the Federal Reserve hopes to maintain this state:
Further adjustments to our policy stance will help maintain the strong momentum of the economy and labor market. Over time, we will take a more neutral position to continue making further progress on inflation. We believe the economy and our policies are in very good shape.
Trump: There are currently no plans to remove Powell.
Trump gave an interview to NBC on Sunday, and when asked by the host whether he would try to replace Powell, he said:
No, I don't think so. I haven't seen that.
I think if I told him, he would do it. But if I asked him to do it, he might not (resign).
This is the first time Trump has publicly supported Powell since the presidential election. However, after the Federal Reserve began raising interest rates in 2018, Trump threatened multiple times to remove Powell from his position, even calling Powell an 'enemy' in 2019, and stated after the market crashed due to the pandemic that:
I think, so far, he has made a lot of wrong decisions...
However, Trump also praised Powell for lowering interest rates to zero to prevent an economic collapse. In summary, the ever-changing Trump currently seems to have no intention of removing Powell, which should be good news for investors who hate uncertainty risk.
Federal Reserve's rate cut chances in December
According to the CME FedWatch tool, the market currently expects an 85% chance of a rate cut of 25 basis points this month, while the chance of maintaining the current interest rate is 14.9%.
