Topline
Federal Reserve Chairman Jerome Powell told reporters Thursday he would not step down from his appointed position if Donald Trump asked him to, saying he’d have no obligation to leave if the president requested it before the end of his term in 2026.
Powell was appointed by Trump in 2017. (Photo by Drew Angerer/Getty Images)
Key Facts
Powell turned down the idea of leaving his position and when asked at a press conference Thursday whether he thought he’d be required to leave if the president asked him to, he said “no.”
Firing Powell from his role as chairman is a bit of a legal gray area, according to American think tank Brookings, which noted there is no statute that includes details about whether a president can remove a fed chair and that other presidents have determined they lacked the authority to fire someone from the position.
No president has ever attempted to remove a Federal Reserve chairman from their role before, though, so the authority to do so has not been legally tested.
An unnamed senior Trump adviser told CNN that Trump will likely not try to remove Powell during the rest of his term, which ends in a year and a half.
Federal Reserve experts also do not expect Trump to try firing Powell, according to MarketWatch.
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Tangent
The Federal Reserve lowered the federal funds rate to 4.5% to 4.75% on Thursday, its lowest level since March 2023 and its second rate cut in recent months following a historic stretch of rate hikes aimed at curbing inflation. Economists are now on the lookout for key changes in Trump’s upcoming term that could potentially jeopardize more rate cuts, citing the president-elect’s tariff proposals.
Key Background
Powell, a Republican, was appointed by Trump in 2017 and reappointed by President Joe Biden in 2021. He has faced consistent criticism from Trump, who has called for the chairman’s firing on multiple occasions. In 2018, Trump considered replacing Powell after the Fed raised interest rates. A year later, the former president called Powell an “enemy” over a disagreement about interest rate cuts. Trump claimed in 2020 he had the authority to remove Powell as chairman, saying Powell had “made a lot of bad decisions, in my opinion,” according to CNN. Powell said this summer he intends to serve the remainder of his term. Trump has pushed against the independent nature of the Fed, saying in August he believed the “president should have at least say” on interest rates while boasting his own economic instincts, saying they were better than that of the Fed or Powell.
Further Reading
Fed Cuts Interest Rates Again—But Uncertainty Swirls As Trump Policies Could Fuel Inflation (Forbes)