data-template=”https://npr.brightspotcdn.com/dims3/default/strip/false/crop/5514×3676+0+0/resize/{width}/quality/{quality}/format/{format}/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F3e%2F32%2F2503dcba4ae9ab7e779bd4a4518f%2Fgettyimages-2164056280.jpg” class=”img” alt=”Fed Reserve Chair Jerome Powell” fetchpriority=”high” />
Trump said he does not intend to fire Powell after he has attacked the Federal Reserve Chair for not lowering interest rates.
Andrew Harnik/Getty Images North America
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Andrew Harnik/Getty Images North America
President Trump stated on Tuesday that he has “no intention” of dismissing Federal Reserve Chair Jerome Powell, putting an end to days of uncertainty regarding the independence of the central bank that had caused turmoil in the financial markets.
“I have no intention of firing him,” Trump stated from the Oval Office, while also emphasizing, “this is a perfect time to lower interest rates.”
Over the past week, Trump has taken to social media to criticize Powell for what he perceives as a delay in lowering interest rates ā even suggesting at one point that Powell’s “termination cannot come fast enough.”
These criticisms had unsettled the markets, particularly as investors were already concerned about the economic consequences of President Trump’s extensive tariffs.
The Fed has been cautious in reducing rates, partly due to the impact of Trump’s tariffs, which could lead to higher prices for imported goods.
Despite this, Trump has portrayed tariffs against U.S. trading partners as beneficial for the country ā especially for American workers and the local manufacturing industry.
“We are generating significant revenue from tariffs,” Trump mentioned in his remarks on Tuesday.
A strained relationship
President Trump and Powell have had a strained relationship, despite Trump nominating Powell for the Fed chair position during his first term in office.
Trump has frequently criticized the central bank for not maintaining lower interest rates and has expressed a desire to influence monetary policy decisions.
However, the Federal Reserve is structured to function independently from political pressures to make tough decisions necessary to combat inflation.
Powell has tried to avoid antagonizing the president but has also affirmed his commitment to serving out his term, which extends until May of next year.
Powell asserts that the president cannot dismiss him unless for “cause,” indicating some form of misconduct. Current Supreme Court precedent supports this position.
Nevertheless, the White House has hinted at challenging this standard by dismissing board members of other independent agencies, raising concerns about Trump’s potential attempts to remove Powell.
