Federal Reserve Chairman Jerome Powell said Friday that he would not resign from his position, even if he were pressured to do so by Donald Trump, CNN is reporting.
Powell was sitting on a panel at the annual American Economics Association’s annual meeting in Atlanta, joined by former Fed chairs Janet Yellen and Ben Bernanke, when he was asked about the possibility of being forced out of his job by Trump. Powell’s answer was direct and to-the-point.
Powell was appointed by Trump in February 2018, but within months, the two men were no longer seeing eye-to-eye. In October, as CNBC reported at the time, Trump had begun to lose faith in Powell and the Federal Reserve in general. Much of that had to do with Powell’s decision to raise interest rates – four times in 2018 – as the stock market started a slide that continues to this day.
“The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it.”
By December, as the stock market slide had started to become even more drastic, Trump began indicating, privately to his team and his advisers, that he might be open to firing Powell, according to CNBC.
Fed Chair Jerome Powell: I will not resign if Trump asks me to https://t.co/TZ9qgEDaKi
— The Daily Beast (@thedailybeast) January 4, 2019
So bad is the stock market slide that the Dow Jones Industrial Average and S&P 500 last month each endured their worst December performance since 1931, both posting 9 percent losses. As of this writing, the Dow Jones Industrial Average is up 825 points.
Even though Federal Reserve Chairs are presidential appointees, traditionally the two positions have operated independently of one another. That’s by design, as the belief in the political arena is that it’s important for the Fed to be able to make decisions independent of political interference. That belief was reiterated by Treasury Secretary Steve Mnuchin back in July.
“We as an administration absolutely support the independence of the Fed.”
The talk of Trump firing Powell has raised the question of whether or not the president can even fire the Fed chair. It’s never happened, and legal scholars debate on whether or not it’s even possible.
Powell, for his part, has indicated that he’d be open to meeting with the president.
“I would say that meetings between presidents and Fed chairs do happen.”
Meanwhile, according to Market Watch, Powell also indicated on Friday that he’s “flexible” on interest rates.
“We will be prepared to adjust policy quickly and flexibility and to use all our tools to support the economy should that be appropriate.”