Can Trump Fire Jerome Powell? Fed Chairman Says He Won’t Resign If Trump Asks
ForbesNOV 20 2024
Major stock indexes reached record highs with the S&P 500 gaining 0.74% to 5,973.10 and the Nasdaq advancing 1.51% to 19,269.46, while the Dow Jones remained relatively flat at 43,729.34.The Federal Reserve on Thursday unanimously approved a quarter-point interest rate cut, bringing the federal funds rate to a range between 4.5 and 4.75%, following Tuesday's reelection of former Pres. Donald Trump.
The rate reduction represents a smaller move compared to September's half-point cut, as the Federal Reserve aims to maintain economic strength while keeping inflation near its 2% target.The reduction is a smaller move compared to September's half-point cut, as the Federal Reserve is seeking to maintain economic strength while keeping inflation on track to meet its 2% target. Over the summer, the Fed started this process by raising the rate to a range of 5.25 to 5.5% — a 23-year high.
Federal Reserve Chairman Jerome Powell firmly stated he would not resign if requested by President-elect Trump, citing legal protections for his position which extends through 2026.In addition to the rate cut, Federal Reserve Chairman Jerome Powell responded to a question about whether he would resign if requested by Trump, by saying "no" and citing legal protections for the chairman position. Powell's term isn't up until 2026.
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Don't start celebrating this announcement as some sort of product of Trump's reelection just yet. This cut was made possible because inflation significantly cooled under the Biden administration. But there's a softening job market, and if Trump goes through with some of his promised economic policies another rate cut may not come, or worse, the economy could head in the opposite direction.