WASHINGTON (NEXSTAR) – Federal Reserve Chairman Jerome Powell announced he would not resign if asked to by President-elect Donald Trump, in a press conference announcing a rate cut on Thursday.
Powell was asked if he believes the President has the power to demote or fire the Federal Reserve Chair.
“Not permitted under the law,” Powell said.
President-elect Trump appointed Powell to his first term as the Chairman of the Federal Reserve Board. He took office in 2018. President Joe Biden nominated Powell to his second term, which ends on May 15, 2026.
In his first term, Trump publicly attacked Powell and the Fed’s decision-making, over rate increases while Trump was in office. The Federal Reserve, by law, is supposed to be independent from the White House.
Powell’s comments came as the Federal Reserve announced a second cut of the benchmark interest rate in two months. The Federal Reserve Board voted to cut the benchmark rate by a quarter percent, pointing to lower inflation and a cooling job market.
“Inflation has eased significantly over the past 2 years,” Powell said. “We don’t want the labor market to soften too much from here.”
Though the Federal Reserve is lowering interest rates, Freddie Mac said interest rates for mortgages, which are not directly tied to the benchmark rate, have increased for 6 straight weeks. The average 30-year mortgage interest rate is 6.79%. Analysts said it’s a sign investors are worried about increasing inflation and more government debt in a second Trump term.
Powell said the Federal Reserve’s decision making is not based on the results of the election.
The Fed is expected to lower rates again in December, though Powell said board members have not made a decision.
