(Bloomberg) — Federal Reserve Chair Jerome Powell said he would not resign from his role if asked to do so by a re-elected Donald Trump, following the Fed’s decision Thursday to lower interest rates by a quarter percentage point.
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When asked at a post-meeting press conference whether he would step down if requested by Trump, Powell replied forcefully, “No.” He also said removal or demotion of any Fed board leaders, including himself, is “not permitted under the law.”
Powell said the US presidential election will have “no effects” on the central bank’s policy decisions in the near-term, noting it’s too early to know the timing or substance of any potential fiscal policy changes.
Fed officials unanimously lowered the federal funds rate to a range of 4.5% to 4.75%. The second-straight rate cut followed a larger, half-point reduction in September, extending efforts to keep the US economic expansion on solid footing.
“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move toward a more neutral stance over time,” Powell said.
His comments follow the re-election this week of Trump, who has a history of publicly criticizing the Fed chair and explored the possibility of firing Powell during his first term in the White House. Trump has also promised to deploy more aggressive tariffs, crack down on immigration and extend tax cuts — policies that could put upward pressure on prices and long-term interest rates and prompt the Fed to scale back rate reductions.
The Federal Open Market Committee said it continued to see the risks to achieving its employment and inflation goals as “roughly in balance” in a statement released Thursday. “The economic outlook is uncertain, and the committee is attentive to the risks to both sides of its dual mandate.”
Policymakers no longer included a line about achieving “greater confidence” that inflation is moving sustainably toward 2%, though they noted inflation has “made progress” toward the central bank’s goal.
The committee modified its language around the job market slightly as well.
“Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low,” the Fed statement said. Powell described the labor market as “solid.”
