In a federal game of cat and mouse, President-elect Donald Trump has continued to do so mocks Jerome Powell and the Federal Open Market Committee (FOMC)—questioning the group’s independence and agenda.
The only problem is, Powell is not playing.
He is the president of the faith firmly shut down speculation and allegations that he and his fellow FOMC members are political.
Powell also refuses to discuss the Republican politician’s threats to his job, saying instead that he is focusing on the task at hand.
In the last monthsThe president-elect and his running mate have questioned whether the FOMC should work more closely with the White House, arguing that this base rate should be reported democratically elected officials.
However, this argument also roughly translates into political interference, a scenario that has been disastrous in the past.
“What about an independent Fed? What does independent mean?’ Powell started on stage in The New York Times DealBook Summit on wednesday
He explained: “It basically means that we can make our own decisions without going back, other than Congress.
“And that gives us the ability to make these decisions for the benefit of all Americans, every time. Not for a particular political party or political outcome. We must achieve maximum job and price stability for the benefit of all Americans and stay out of politics altogether.”
Keeping it out of politics may be easier in theory than practice—especially when the next Commander-in-Chief has explicitly done so He stated that he thinks Powell is “political”.
During the election campaign – before the FOMC started lowering the base rate – Trump said the fox News: “It looks to me like (Powell) is trying to lower interest rates, maybe to get people elected.”
Powell, who served as Federal Reserve chairman for six years, added that Fed independence is supported on both sides of the hill, “it’s the law of the land.”
“I’m not worried that we’re in danger of losing our statutory independence, because I think those sets of ideas are what people believe in,” Powell added.
Jerome’s work
The current president has also hinted that he may fire Powell when he is nominated for office next month.
From a legal point of view, the president has no power To remove a chairman of the Federal Reserve, although they may nominate an individual to that position.
ironically, Trump himself suggested the role to Powell During his last administration, he said Powell had “demonstrated steady leadership, good judgment and political experience.”
The activist-turned-politician has since changed his tune, first saying he would remove the president, but then he told Bloomberg “I would let him serve, especially if I thought he was doing the right thing.”
That was, of course, before Powell and his cohorts cut the key rate in September for the first time in years—before the election, Trump had scared the FOMC off in a way it shouldn’t.
Defying Trump, analysts are now questioning whether Powell will have the support to complete his term through 2026.
When asked on stage in New York, Powell refused to draw.
“I never dispute what elected officials say, so I’m going to let you down here,” Powell told reporter Andrew Ross Sorkin. “This is our focus: the US economy is in a very good state right now, it is in a very good state.
“We are the envy of other major economies in the world and I want to do everything I can to keep them there for the rest of my term.”
Shadow Powell
Powell, also a former lawyer and investment banker, was tight-lipped but rejected the candidates’ proposals. Treasury Secretary Scott Bessent for a shadow Fed chair.
in an interview Barron’s In October, Bessent said Powell’s successor should be appointed to oversee or shape monetary policy.
Bessent’s remarks — which included saying that “no one cares what Powell has to say anymore” — were recounted to the Fed chairman in front of an audience in New York.
Powell looked back, drawing laughter from the audience, before adding: “I don’t think that’s on the table.”
The monetary policy expert said he was “confident” he would have a constructive working relationship with Bessent: “The Treasury secretary and the Fed chairman have had breakfast or lunch together every week for 75 years … there has to be trust and reciprocity. respect and recognition of the different authorities and boundaries we have.” “.
