President-elect Donald Trump said on Sunday, that he has no immediate plans to remove Federal Reserve Chairman Jerome Powell after getting elected in November, marking a notable shift in his stance toward the central bank leader ahead of a crucial December Fed meeting.
What Happened: In an interview on NBC’s “Meet the Press with Kristen Welker” that aired Sunday, Trump responded “No, I don’t think so” when asked about replacing Powell, though he added cryptically that Powell “would” step down if told to do so.
The comments come as markets closely watch the Fed’s upcoming Dec. 18 meeting, where traders see a 65% chance of another interest rate cut, according to CME FedWatch data.
The Fed has already implemented two rate cuts in 2024 – a 50-basis-point reduction in September followed by a 25-basis-point cut in November.
Powell has firmly asserted his independence, recently stating he would not resign if asked and emphasizing it’s “not permitted under the law” for a president to remove the Fed chair without cause. Legal experts note Fed governors can only be dismissed for misconduct or neglect of duty, not policy disagreements.
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Why It Matters: The apparent detente follows years of criticism from Trump, who previously called Powell “the enemy” in 2019 and threatened removal after rate hikes in 2018. During the pandemic in March 2020, Trump claimed Powell made “bad decisions” but later praised emergency rate cuts.
The relationship has drawn increased scrutiny after some Trump allies, including Sen. Mike Lee (R-Utah), called for bringing the Fed under presidential control. Tesla Inc. CEO Elon Musk, a major Trump donor, reposted Lee’s post on X.
Powell, originally nominated by Trump in 2017 and reappointed by President Joe Biden, has recently made headlines discussing Bitcoin‘s (CRYPTO: BTC) role in markets, comparing it to “digital gold” while maintaining focus on traditional banking stability.
He also described the U.S. economy as in “remarkably good shape” with 2.5% growth and inflation down to around 2.3%.
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Photo: Courtesy of International Monetary Fund on Flickr
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
