Trump says he won’t remove Jay Powell from the Fed before his term ends

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Donald Trump said he would not seek to remove Federal Reserve Chairman Jay Powell before his term expires in May 2026, but promised to push for sweeping tariffs, mass deportations and tax cuts during his first days in the White House.

In an interview with NBC News’ Meet the Press, Trump talked about his priorities for the world’s largest economy as his second administration begins in January, including cutting aid. aid Ukraine and reduce government bloat.

Asked if he plans to replace Powell, who was appointed by Trump in 2017 and then re-nominated by President Joe Biden for a second term as head of the US central bank or not, the president-elect says he doesn’t have one.

“I think if I told him to do it, he would do it. But if I asked him to do that, he probably wouldn’t do it,” Mr. Trump added.

Since winning the US presidential election last month, bother Word spread across Wall Street and Washington that Trump would threaten the Fed’s independence, which is considered crucial to the stability of both the global economy and financial markets.

On the campaign trail, Trump seemed to suggest that he would continue the attacks during his first term, in which he called Powell an “enemy” for resisting calls by Trump to lower interest rates. grandfather.

Trump has questioned whether he should have a more direct say in monetary policy decisions. Scott Bessent, his pick for Treasury Secretary, has also floated the idea of ​​announcing an heir apparent who would serve as “shadow” Fed chairman, weakening the institution’s communications operations. by providing conflicting guidance on the policy outlook.

Immediately after the election, Powell was adamant that he would not resign early even if the president-elect asked him to do so. He also told reporters that there was no legal basis for him to be dismissed early.

Last week, he added that he “not interested” about Fed independence during the second Trump administration, saying it was protected by “the law of the land.”

Still, economists are bracing for stress, as they expect Trump’s plan to impose tariffs on trading partners, deport large numbers of immigrants and push for economic growth. growth through reduced taxes and regulations will put pressure on prices, thereby limiting the amount of interest rates the Fed can reduce. overall exchange rate.

The Fed has cut its benchmark policy rate twice since September and is poised to do so again later this month, but officials have begun to hint that the pace will slow in 2025.

Trump acknowledged that he “cannot guarantee anything” about higher costs for Americans if his tariff proposals are enacted, though he denied that they would weaken the economy. He also again used tariffs as a negotiating tool, saying he had “ended the war with tariffs.”

The president-elect said he also has “no choice” but to deport all illegal immigrants in the US. But he said he would work with Democrats to create a plan for undocumented people who entered the country as children. He also vowed to end birthright citizenship through executive action.

Regarding efforts to reduce government spending, Trump said his administration would raise the age for entitlement programs such as Social Security or Medicare. “People are going to get what they’re getting,” he said.

The president-elect said those plans would likely be accompanied by a withdrawal of U.S. participation in monitoring activities, including providing aid to Ukraine as well as the country’s participation in NATO.