President-elect Donald Trump has shut down speculation about removing Jerome Powell from his position as Federal Reserve Chair. These speculations come from him saying during campaign that he would take over the central bank and be in charge of the economy himself.
But now, in an interview on NBC’s Meet the Press, Trump said, “Fire him? No, I don’t see it.”
“I think if I told him to, he would,” the president added. “But if I asked him to, he probably wouldn’t.” Sounds like he knows his man all too well. He did appoint him, after all. And Powell has made it clear that he’s not going anywhere.
Days after Trump’s victory, the Fed chair reaffirmed the central bank’s independence, telling reporters he wouldn’t step aside if asked and that the president doesn’t have the authority to fire him or other senior Fed leaders.
Trump’s take on Powell and monetary policy
Trump’s views on the Federal Reserve have always been controversial. He genuinely believes that the president should have more influence over monetary policy.
In an October interview with Bloomberg, Trump said, “I think I have the right to say, ‘I think you should go up or down a little bit.’ I don’t think I should be allowed to order it, but I think I should be able to comment.”
He didn’t stop there. Trump ridiculed Powell’s job, calling it “the greatest job in government.” In his words, “You show up to the office once a month, and you say, ‘Let’s see, flip a coin.’”
It’s no secret that Trump’s frustration with Powell stems from the Federal Reserve’s interest rate hikes during his first term, which Trump believed slowed economic growth.
Back in 2018, Trump even considered firing Powell but didn’t follow through. Legal scholars pointed out that removing a Federal Reserve Chair isn’t as simple as giving the order.
The Federal Reserve Act only allows board members to be removed “for cause,” which means serious misconduct or abuse of power, not just disagreements over policy. “Looks like I’m stuck with you,” Trump told him over the phone one night from the Oval.
Despite their past clashes, Powell has said he isn’t anticipating new tensions with Trump’s administration. While Powell’s term as Chair runs through 2026, his 14-year tenure as a Federal Reserve Governor doesn’t expire until 2028, which gives Trump limited room to replace him outright.
POTUS’ power over the Federal Reserve
The president of the United States has the power to appoint members to the Board of Governors. This includes selecting key roles like Chair and Vice-Chair. Governors serve 14-year terms, and chairs serve four-year terms.
All of them sit on the Federal Open Market Committee (FOMC), the group that decides interest rates. During his next term, Trump will have at least two opportunities to appoint members to the Fed Board. One of those openings will come in January 2026 when Fed Governor Adriana Kugler’s term ends.
These appointments will require Senate confirmation, but with a Republican majority in the Senate, Trump is likely to face less resistance than he did during his first presidency, when several of his Fed picks were blocked.
Even with these appointments, Trump’s influence is limited. The Fed’s policymaking structure includes 12 regional bank presidents who are selected independently by the boards of their respective banks, subject to approval from the Federal Reserve Board. This decentralized system reduces the president’s ability to directly control monetary policy.
Trump isn’t the first president to try to influence the Federal Reserve, but his approach has been one of the most public. He often airs his grievances in press conferences and interviews, accusing Powell of making poor policy decisions.
He also criticizes the Fed’s track record, saying they’ve “sort of gotten it wrong a lot.” According to Trump, Powell’s timing on key decisions has been “a little bit too early and a little bit too late.”
The case for Fed independence
The central bank’s role is to manage inflation and employment without political interference, which Powell believes is essential for maintaining credibility with investors and the public. “Without question, the Fed must remain apolitical,” Powell said earlier this year.
But the reality is more complicated. The Federal Reserve often operates within a political context, collaborating with the Treasury Department and considering the economic impact of government policies like tax cuts or spending initiatives.
Critics argue this interaction makes it impossible for the Fed to be entirely apolitical. Economists like Peter Conti-Brown, a Fed historian at the Wharton School, describe the Federal Reserve as a “deeply political institution.”
However, he distinguishes between politics and partisanship, emphasizing that the Fed’s decisions often reflect input from multiple factions.
Despite these challenges, the Federal Reserve has maintained its independence for over a century. Central banks around the world rely on this model to make tough decisions, such as raising interest rates to fight inflation, without fear of political retaliation.
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