Can Trump fire the Chairman of the Federal Reserve? Powell answered "no" four times at the press conference

On Thursday, November 7th, during a press conference following the Federal Reserve's anticipated interest rate cut, Jerome Powell was repeatedly pressed on whether he could retain his position as Fed Chair during Trump's second presidential term, prompting him to lament, "I really don't intend to answer too many political questions."

For instance, a reporter mentioned that some of Trump's campaign advisors suggested that if Trump, as president, asked the Fed Chair to resign, Powell should resign. Powell succinctly replied with one word: "No."

The reporter then followed up, asking if he believed he was legally required to step down. Powell again answered with one word: "No."

Next, someone asked whether he thought the president had the authority to fire or demote him, and whether the Fed confirmed the legality of the president's ability to demote other Fed governors holding leadership positions. Powell stated, "The law does not allow it."

Finally, someone persistently inquired whether he was concerned about Trump's ongoing criticism of Powell's performance and its impact on the Fed's independence. Powell responded, "I won't discuss political issues today, but thank you for the question."

According to media reports, an anonymous senior advisor to Trump revealed that Trump may allow Powell to continue leading the Fed until his term ends in May 2026, but warned that "Trump could change his mind at any time." However, in July, Trump had stated without hesitation that he intended for Powell to complete his term as Fed Chair.

Gary Cohn, who served as the White House economic policy director during Trump's first presidential term, was interested in becoming Fed Chair, but sources indicated that Cohn resigned in protest of Trump's steel tariffs, making it difficult for him to secure the position. Others suggested that former Fed governor Kevin Warsh and former chief economist of the Trump administration Kevin Hassett were more likely candidates for the Fed Chair position.

Public records show that during Trump's presidency, he frequently criticized the Fed and Powell, even threatening to remove him, believing that the pace of monetary policy easing was not fast enough to foster U.S. economic prosperity. In October, Trump also stated that the U.S. president should have the authority to participate in interest rate decisions and to comment on whether rates should be raised or lowered.

Trump has also criticized the Fed for a lack of transparency, arguing that the Fed's policy deliberations are conducted privately, with complete meeting minutes released weeks later. He expressed a desire for real-time publication of FOMC meeting minutes and economic reports, and hoped meetings would be conducted in front of cameras.

In addition to criticizing Powell for "making many wrong decisions," last month Trump stated at an event hosted by the Chicago Economic Club that being Fed Chair is one of the easiest jobs in government:

"You only need to go to the office once a month and say, 'Let's flip a coin (to decide monetary policy),' and then everyone talks about you like you're a god."

Today, Powell clearly stated that the upcoming U.S. elections would not impact monetary policy in the short term, but also warned that any changes in government could affect monetary policy as the Fed seeks to lower interest rates:

"In principle, any policy of the U.S. government or policies enacted by Congress may have economic impacts over time. Therefore, along with countless other factors, these economic impact forecasts will be incorporated into the Federal Reserve's economic models and taken into consideration."

After Trump's victory, the market has lowered its expectations for a rate cut in January next year, with the more mainstream view being that a pause in rate cuts is likely at that time. The probability of this has risen from 44% a week ago to 54%, while the probability of a 25 basis point rate cut in December has slightly decreased from 77% to 67%.

Some analysts pointed out that Trump's victory has sparked speculation that the Federal Reserve may cut rates at a slower and more gradual pace, as policies aimed at restricting illegal immigration and implementing new tariffs could push inflation higher