Federal Reserve Chair Jerome Powell on Monday said he has no plans to leave his post as head of the U.S. central bank before his term expires, pouring cold water on assertions by some loyalists to Donald Trump that Powell would be swiftly out of a job should the former president regain the White House.
Asked at an event on Monday whether he intends to serve out his full term as chair, which expires in 2026, Powell said: "Yes."
The remark potentially sets the scene for another run of friction between Powell and Trump if the Republican beats incumbent President Joe Biden in the Nov. 5 election. The strained relationship between Trump, who survived an assassination attempt on Saturday, and Powell is one that will get closer attention should Trump regain the White House or appear on track to do so as Election Day approaches.
Powell was first appointed to the Fed Board of Governors by former President Barack Obama, but it was Trump who picked him to lead the central bank, a post Powell assumed in early 2018.
Trump turned against him soon after, railing against the interest rate hikes that the Fed delivered during Powell's first year at the helm. Trump went so far as to discuss firing the Fed chief, although aides later said Trump came to the conclusion that he likely did not have the power to do so.
That did not stop Trump from continuing to threaten Powell throughout his presidency, a practice Biden has refrained from during his term.
The next president will have an opportunity to pick the next Fed chair. Asked Monday whether he would remain as chair if reappointed by the next president, Powell said: "I have nothing for you on that today."
Trump, for his part, has said he would not reappoint Powell, and some Trump loyalists have predicted Powell would depart shortly after the start of a second Trump term.
Steve Bannon, the former Trump strategy chief now serving a prison sentence for defying a congressional subpoena from the committee that probed the Jan. 6, 2021, U.S. Capitol attack, recently told a New York Times columnist he believes "right after The Associated Press calls the election that Jerome Powell will tender his resignation."
Peter Navarro, former Trump trade adviser also in prison for refusing to cooperate on the congressional investigation of the Jan. 6 attack, said he expected Powell "will be gone in a hundred days" of a new Trump term, according to an interview with Semafor.
While Powell's own comments on Monday cast those assertions into doubt, Trump allies have been reported to be drafting proposals that would attempt to erode the Fed's independence if Trump wins. In April the Wall Street Journal reported, citing people familiar with the matter, that a small group of the Trump allies has produced a nearly 10-page document outlining a policy vision for the central bank.
That report said the group argues that Trump should be consulted on interest rate decisions and would have the authority to remove Powell before his term as chair ends in 2026. While his term as chair expires in early 2026, his position as a Fed governor continues until Jan. 31, 2028, although it would be unusual for a former chair to retain a board seat after leaving the leadership post.
Another group organized by the conservative-leaning Heritage Foundation has also come up with a list of initiatives to limit the Fed's reach in a second Trump administration. Trump himself, however, has distanced himself from the Project 2025 initiative.
Trump also has said he believed Powell would lower interest rates to help President Joe Biden's prospects for re-election in November.
Indeed, with inflation cooling, financial markets now predict that the Fed will likely cut rates at its Sept. 17-18 meeting, only about seven weeks before the Nov. 5 presidential election. Powell has been asked repeatedly over the last week if the election would play into the Fed's decision on whether to cut rates, and Powell said again on Monday that he and other central bank policymakers do not take politics into account in their decisionmaking.
Powell, who began his appearance on Monday by calling the attempt on Trump's life on Saturday a "sad day for our country" and wished Trump well, said: "We don't take political considerations into account. We don't put up a political filter on our decisions."
