President-elect Donald Trump is expected to retain Federal Reserve chair Jerome Powell until his term expires in May of 2026, according to a senior adviser.
“The adviser cautioned that Trump could always change his mind, but his present view — and that of Trump’s economic team — is that Powell should remain atop the central bank as it pursues its policy of cutting interest rates,” CNN confirmed Thursday.
Trump is evidently pleased with Powell’s decision to keep cutting rates — something he just did again on Thursday. Lower rates typically coincide with cheaper loans and better credit card rates.
⚠️BREAKING:
*FEDERAL RESERVE CUTS FED FUNDS RATE BY 25BPS TO 4.75%$SPY pic.twitter.com/Pskm0TRqWc
— Investing.com (@Investingcom) November 7, 2024
Powell has been at his post since Trump appointed him in 2018.
Trump’s decision to retain the Fed chair comes despite him having voiced frustrations about Powell multiple times while campaigning during the 2024 presidential election.
In February, for example, he accused Powell of considering rate cuts to give Democrats an advantage in the presidential election.
“It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected, I don’t know,” he said at the time. “I think he’s going to do something to probably help the Democrats, I think if he lowers interest rates.”
He also said he wouldn’t reappoint Powell.
Listen:
President Trump says Federal Reserve Chair Jay Powell is trying to lower interest rates to help Joe Biden and Democrats get elected. DJT also says he would not reappoint Powell.
When asked why the stock market is rallying: “Because they think I’m gonna be elected.” pic.twitter.com/JMDUMw8Jhe
— Patri0tsareinContr0l (@Patri0tContr0l) February 2, 2024
By June, Trump had changed his mind.
“I would let him serve it out, especially if I thought he was doing the right thing,” he told Bloomberg at the time.
However, he did once again reiterate his opposition to rate cuts, saying, “It’s something that they know they shouldn’t be doing.”
In a subsequent Bloomberg interview in October, he argued that the president should be allowed to weigh in on rate-cut decisions.
“I don’t think I should be allowed to order it, but I think I have the right to put in comments as to whether the interest rates should go up or down,” he said.
According to Barron’s, the president-elect’s allies “have drafted proposals that would require Fed chair candidates to privately agree to consult with Trump on the central bank’s [rate cut] decisions.”
Powell for his part doesn’t seem to be concerned with what Trump thinks. When asked by reporters on Thursday whether he’d step down if asked, he bluntly replied “No — not permitted under the law.”
Fed Chair Powell brings the heat to quash any presidential overreach in monetary policy
If [Trump] asked you to leave, would you go?
No
Do you think the President has the power to fire or demote you?
Not permitted under the law
What?
Not. Permitted. Under. The. Law. pic.twitter.com/KUrMVeVodC
— Daniel Di Martino (@DanielDiMartino) November 8, 2024
Powell has been busy determining when and if to cut rates.
“Moving too quickly on rate cuts could risk reigniting inflation, while not moving fast enough could weaken the labor market more than intended,” Barron’s notes. “Powell said [Thursday] that the economy and the Fed’s policy are in a very good place in the middle of those risks.”
During Thursday’s pow-wow with reporters, Powell also asserted that “it’s too soon to know about potential policy changes that could come under a second Trump administration, or how they might affect the Fed’s dual mandate to achieve maximum employment and price stability,” according to Barron’s.
“If the economy remains strong and inflation is not sustainably moving toward two percent, we can dial back policy restraint more slowly,” he said. “If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can move more quickly.”
“Policy is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate,” he added, referencing the Fed’s desire to lower inflation while keeping the labor market strong.
Meanwhile, it’s believed that former Trump administration official Gary Cohn wants the job of Federal Reserve chair.
“[B]ut former Trump officials have said the fact that Cohn resigned in protest over Trump’s steel tariffs makes it highly unlikely he’d get it,” according to CNN.
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Vivek@bizpacreview.com
V. Saxena is a staff writer for BizPac Review with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University.
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