Bao Weihui responds to Trump's "firing" threat: will not resign early!

After a while, Trump turned against Powell and heavily criticized his interest rate hikes during Powell's first year at the Fed. Trump even discussed firing the Fed chairman, with aides later revealing that Trump concluded he likely did not have the authority to do so. However, this did not stop Trump from continuing to threaten Powell throughout his entire presidency, something Biden never did during his term.

Trump has already stated that he will not reappoint Powell, and some Trump supporters predict that Powell will resign shortly after Trump's second term begins.

Steve Bannon, the former White House chief strategist during Trump's presidency, recently told a columnist for The New York Times that he believes "Powell will resign after the election results are announced." Bannon is currently serving time in prison for refusing to comply with a congressional subpoena from the committee investigating the January 6, 2021, attack on the U.S. Capitol.

Peter Navarro, Trump's former trade advisor, is also in jail for refusing to cooperate with Congress's investigation into the January 6 attack. In an interview, Navarro also said he expects Powell to "leave within the first hundred days of Trump's new term."

While Powell's remarks on Monday cast doubt on these claims, reports indicate that Trump's allies are drafting proposals that would attempt to weaken the Fed's independence if Trump wins. In April of this year, The Wall Street Journal reported, citing sources familiar with the matter, that a small group of Trump allies had drafted a nearly 10-page document outlining the Fed's policy vision.

The group believes that the Fed should seek Trump's opinion on interest rate decisions and that Trump has the authority to dismiss Powell before his chairmanship ends in 2026. Although Powell's chairmanship is set to end in early 2026, his term as a Fed governor will continue until January 31, 2028. However, it is unusual for a former chairman to retain a seat on the board after leaving the leadership position.

Another group organized by the conservative Heritage Foundation has also put forward a list of initiatives aimed at limiting the Fed's influence during Trump's second term. However, Trump himself has kept his distance from this initiative called "Project 2025."

Trump also stated that he believes Powell will lower interest rates to help Biden's chances of reelection in November.

In fact, with inflation cooling down, financial markets now expect the Fed to cut rates at the meeting on September 17-18, with only about seven weeks left until the presidential election on November 5.

Powell has been asked multiple times last week whether the election would affect the Fed's decision to cut rates. He reiterated on Monday that he and other policymakers do not consider political factors when making decisions.

When Powell made his first public appearance on Monday, he called the assassination attempt on Trump last Saturday a "sad day for our country" and wished Trump well. He said, " We do not consider political factors. We do not filter our decisions through politics. **”