Trump Clarifies Again He Won’t Remove Fed Chair Jerome Powell

Then-President Donald Trump looks on as his nominee for chair of the Federal Reserve, Jerome Powell, speaks during a press event at the White House on Nov. 2, 2017. Drew Angerer/Getty Images

President-elect Donald Trump said again that he will not try to remove Federal Reserve Chair Jerome Powell before his term expires in 2026.

In an interview with NBC’s “Meet the Press” on Dec. 8, host Kristen Welker asked Trump whether he has plans to replace Powell.

“No, I don’t think so. I don’t see it,” Trump replied. “But I think 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.”

“You don’t have plans to do that right now?” Welker said.

“No, I don’t,” Trump replied.

At the post-election November policy meeting press conference, Powell said that he would not step down if Trump were to ask him to. Additionally, reporters questioned whether the president-elect could terminate the Fed chief.

“Not permitted under the law,” Powell responded at the time.

The president-elect commented on Powell and monetary policy throughout his 2024 campaign.

Speaking to Bloomberg in June, Trump signaled that he would allow the central bank head to serve the remainder of his term.

Trump, however, has said he believes that presidents should have more of a say in Federal Reserve policies.

“I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman,” Trump told reporters in August during a news conference at his Mar-a-Lago estate.

At the Economic Club of Chicago in October, Trump said that the president should not be allowed to order interest rate hikes or cuts.

“But I think I have the right to put in comments as to whether the interest rates should go up or down,” he said.

Of the job Powell is doing at the central bank, Trump said, “You show up to the office once a month, and you say, ‘Let’s flip a coin,’ and everybody talks about you like you’re a god.”

In recent months, market watchers have speculated that the Fed’s independence and Powell’s job might be undermined under a second Trump term.

This concern gained steam when billionaire financier Scott Bessent, selected by Trump to serve as Treasury secretary, suggested in an interview with Barron’s that the incoming administration could nominate Powell’s successor immediately, allowing the financial markets to concentrate solely on what the next Fed chief thinks.

Powell—nominated by Trump and renominated by President Joe Biden—said he does not believe the Fed’s independence will be diminished.

“I’m not concerned that there’s some risk that we would lose our statutory independence because I do think that those set of ideas are strongly believed by people,” Powell said at The New York Times’ DealBook Summit this past week in an interview with host Andrew Ross Sorkin.

The Fed and the Treasury Department will continue to have a cordial working partnership in January 2025, Powell said.

Federal Reserve Chair Jerome Powell's speech is broadcast on the floor of the New York Stock Exchange on Aug. 23, 2024. Angela Weiss/AFP via Getty Images

“We’ve got strong legal independence, and we do try to run the Fed respectfully,” Powell said.

The relationship between the incoming president and Powell has been contentious since Trump’s first term in the White House.

In 2019, Trump lambasted Powell for what he considered mismanaging interest rates, writing on Twitter, which has since been renamed X, that he and the Fed failed again.

“No ‘guts,’ no sense, no vision! A terrible communicator!” Trump said.

After some pushback by the White House, the Fed followed through on three quarter-point interest rate cuts by the end of 2019, lowering the benchmark federal funds rate to a range of 1.5 percent to 1.75 percent.

The rate-setting Federal Open Market Committee will hold its next two-day policy meeting on Dec. 17 and 18.

According to the CME FedWatch Tool, investors overwhelmingly expect monetary policymakers to pull the trigger on another quarter-point cut.

Looking ahead, the debate appears to be whether the central bank should keep cutting rates, hit the pause button, or slow the pace of easing.

The futures market has signaled that investors do not think the Fed will be as aggressive as initially thought, with a more than 60 percent chance of a rate pause at the January meeting.

“Fed policy hopes for next year have also been dashed as expected cuts have diminished (with just 50 basis points now expected by futures),” Mark Malek, chief information officer at Siebert Financial, said in a note emailed to The Epoch Times.