In an interview that aired Sunday, U.S. President-elect Donald Trump stated he will not attempt to replace Federal Reserve Chair Jerome Powell when he takes office in January.
When asked on NBC News’ “Meet the Press with Kristen Welker” if he would seek to remove Powell, whose term runs until 2026, Trump replied, “No, I don’t think so. I don’t see it.”
Trump remarked that he doubts Powell, with whom he has previously clashed over interest rates, would leave quietly. “I think if I told him to [go], he would. But if I asked him to, he probably wouldn’t,” Trump told Welker.
Trump campaigned on a promise to reduce mortgage rates and other borrowing costs for U.S. households, indicating potential conflicts with Powell over interest rate policy, similar to those during his first term. Additionally, Trump’s commitment to implementing broad tariffs could complicate the Fed’s efforts to manage inflation.
Trump appointed Powell, a former private equity executive and Republican, as Fed chair in early 2018, succeeding Janet Yellen, who later became Treasury Secretary under President Joe Biden. Biden subsequently reappointed Powell for his current term.
However, the relationship between Trump and Powell soured over time, with Trump frequently criticizing the Fed and its leadership during his first term. In late 2018, Trump privately considered dismissing Powell due to frustrations over the Fed’s decision to raise interest rates and publicly opposed further hikes.
Traders are projecting that the Federal Reserve will cut interest rates at its upcoming policy meeting on December 17-18, following recent data indicating a cooling U.S. labor market. A quarter-percentage-point reduction would lower the Fed’s policy rate to the 4.25%-4.50% range, marking a full percentage point drop from the rate in September when the central bank initiated its easing cycle.
