Jerome Powell, the Chairman of the U.S. Federal Reserve, responded firmly when asked if he would resign under pressure from President Donald Trump, reaffirming that he would not step down as the central bank implemented its second consecutive interest rate cut on Tuesday. The Federal Reserve reduced interest rates by a quarter point, bringing the benchmark rate to a range of 4.5% to 4.75%, a sign that the central bank’s efforts to manage inflation are starting to take effect.
Trump, known for his frequent and vocal criticism of the Federal Reserve, has openly called its officials “boneheads” and questioned the Fed’s independence throughout his political career. He has argued that the central bank should better align with his economic policies, especially when it comes to interest rates, which he believes should be kept lower to encourage economic growth. Trump’s dissatisfaction with the Fed’s policies has raised concerns about the independence of the central bank, with many wondering whether a second Trump term would lead to increased political pressure on the Federal Reserve.
Powell, however, made it clear that he would not resign if asked by the president. When pressed on the issue during a press conference, Powell responded simply, “No,” further reinforcing the Fed’s commitment to independence. He explained that members of the Federal Reserve are protected by law from political interference, particularly with regard to their ability to carry out their roles free from political pressure. Powell’s position underscores the importance of maintaining the integrity of the central bank and ensuring that its decisions are based on economic data, not political considerations.
The rate cut decision, which reduces the federal funds rate to 4.5% to 4.75%, reflects the Fed’s ongoing efforts to control inflation. Inflation had surged to a 40-year high in 2022, but recent data shows a decline, with the PCE index dropping to 2.1% in September. Despite this progress, Powell emphasized that the job is far from done. While inflation is moving closer to the Fed’s target of 2%, Powell noted that the central bank will continue to monitor economic conditions closely and remain ready to make further adjustments as necessary.
With the re-election of Trump, questions about the future of the Federal Reserve have resurfaced. The president has repeatedly made it clear that he believes the Fed should be more responsive to his economic policies, suggesting that the central bank should prioritize growth over inflation control. Powell’s resolute answer to the question of resignation signals his commitment to preserving the Fed’s autonomy, regardless of political pressure. The coming years, as Powell’s second term as chair continues, will likely bring further challenges as the Fed continues to balance inflation control with economic stability.
