Trump asserts unilateral authority over Federal Reserve leadership, stating ’Jerome Powell’s position hinges on my decision’
Former President Donald Trump has made a bold declaration regarding his perceived influence over Federal Reserve leadership, emphasizing his belief in direct control over the tenure of Chair Jerome Powell. The statement underscores ongoing tensions between political figures and central bank independence, with Trump framing Powell’s continuation in the role as contingent upon his personal approval. This remark comes amid broader discussions about the appropriate relationship between executive power and monetary policy institutions, raising questions about potential future pressures on Fed autonomy should Trump return to office.
Powell warns tariffs complicate the Fed’s job
Trump and his economic advisers have said they want longer-term interest rates to drop. That would make it cheaper for Americans to borrow for things like homes, cars, and appliances. But Powell doesn’t directly control those rates. He manages the short-term federal funds rate. Trump’s new tariffs caused long-term borrowing costs to rise, putting pressure on households and businesses.
Powell has warned that the tariffs would raise inflation and slow growth. That’s the opposite of what Trump wants. And because of that, the Fed might not be able to cut rates anytime soon. Powell has made it clear that even if the economy slows, the central bank’s focus will stay on reducing inflation. He’s not changing course because of White House complaints.
Elizabeth Warren, the Massachusetts senator and top Democrat on the Senate Banking Committee, said Thursday that if Trump were allowed to fire Powell, it would shake up U.S. markets.
Speaking from the New York Stock Exchange, she said, “If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States.” The Senator also said, “I have tangled with Powell on a regular basis about both regulations and interest rates.”
Warren added that the strength of the U.S. stock market comes from the belief that big decisions aren’t made for political reasons.
“The infrastructure upholding the stock market — and therefore the global economy — is the idea that the big pieces move independent of the politics.”
Warren warned that if economic decisions were left up to the president’s “magic wand,” the U.S. would be no different “from any other two-bit dictatorship around the world.”
Powell was nominated by Trump back in 2017, but Joe Biden reappointed him in 2022 to another four-year term. That term runs until May 2026.
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