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During a post-FOMC press conference, a reporter asked Powell: “Some of the President-elect’s advisers have suggested that you should resign. If he asked you to leave, would you go?” To this, Powell replied, “No”.
Donald Trump appointed US Federal Reserve Chair Jerome Powell to lead the US Federal Reserve in November 2017.
US Federal Reserve Chairman Jerome Powell on Thursday said he would not resign if asked by President-Elect Donald Trump. He said this in response to a query during a press conference after the November 2024 monetary policy announcement.
During a press conference, a reporter asked Powell: “Some of the President-elect’s advisers have suggested that you should resign. If he asked you to leave, would you go?”
To this, Powell replied, “No”.
US President-elect Donald Trump has frequently aired frustrations with Powell and occasionally threatened to remove the Fed chair from his post, which no president has ever done.
In July, before Trump was elected, the Fed chair was asked whether he intended to serve out the remainder of his term, and he said, unequivocally, “Yes.”
Interestingly, Donald Trump appointed Jerome Powell to lead the US Federal Reserve in November 2017. President Joe Biden reappointed him five years later for another term as Fed Chair that is set to expire in 2026.
However, later, Trump started passing statement against Powell. Trump also said his prior threats to remove Powell “because he was keeping the rates too high” caused the Fed chair to lower rates “too much”.
While the Fed chair has the most clout at Federal Open Market Committee meetings, they are not the only official to determine where interest rates should be. At every monetary policy meeting there are 11 other Fed officials who vote on interest rate moves.
On Thursday, November 7, 2024, the US Federal Reserve cut the key interest rates by another 25 basis points to 4.50-4.75 per cent. The rate cut is in line with the market expectations. It comes less than two months after it reduced the interest rates by a significant 50 basis points, thus kickstarting the rate cut cycle after a gap of four years.
“The unemployment rate is notably higher as against the last year but it has edged down over the past three months and remains low at 4.1 per cent in October…. Inflation has eased significantly over the past two years. Total PCE prices rose 2.1 per cent during the 12 months ended September, excluding food and energy. Core PCE prices rose 2.7 per cent. Overall, inflation has moved much closer to our 2 per cent longer-run goal but core inflation remains somewhat elevated,” Powell said.
This was the first US monetary policy after Donald Trump’s return to power as the president of the country. It is significant as the policy comes against the backdrop of Trump’s proposals like 10% tariff on all imports and higher taxes on Chinese goods, among others, that are expected to boost inflation.
The US Federal Reserve in its previous policy in September cut its key Federal Funds rates by a significant 50 basis points (bps) to 4.75-5 per cent, to push economic growth. This rate cut, which had come after a gap of four years, was the first in a series of US Fed rate cuts that might extend into 2026. In its dot plot, the US Fed in September 2024 had projected 2.5 percentage points (pp) interest rate cuts by the end of 2026, including the 0.5-pp reduction announced in September.
The US central bank is committed to supporting maximum employment and returning inflation to its 2 per cent objective.
