Federal Reserve Chairman Jerome Powell defiantly said Wednesday he would not accept being fired by President Donald Trump, who has waged an unprecedented public pressure campaign on the central bank.
California Democratic Rep. Maxine Waters pressed Powell at a House Financial Services Committee hearing about whether he would comply if he were to get a phone call from Trump asking him to pack up his stuff and go.
“Of course, I would not do that,” replied Powell, who was appointed by Trump.
“I can’t hear you,” said Waters in response to which the hearing room erupted in laughter.
“The answer would be, ‘No,’” Powell said.
Waters pressed further, asking, “Do you believe the President doesn’t have the authority?”
He replied: “What I have said is the law gives me a four-year term and I fully intend to serve it.”
Trump has openly expressed demands for lower interest rates, claiming that the Fed has dampened the US economy with interest rate increases last year. Those moves were taken to prevent inflation and give policymakers a bigger cushion in case of a recession, standard policy steps given the continued strength of the US job market.
Powell did, however, indicate on Wednesday that a rate cut is coming because of global economic turmoil, in part tied to Trump’s trade wars – a reversal of his previous plan to steadily raise rates this year that lines up with Trump’s demands.
“It appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook,” Powell said in prepared remarks.
The President has cited the economy as he begins his 2020 campaign, and views any efforts to rein in growth as potentially damaging to his own popularity. Last winter, as the stock market tanked amid a series of tariff threats against China and what became a record-breaking federal shutdown, Trump asked advisers whether he could fire Powell.
More recently, Trump has pointedly declined to rule out the possibility of demoting Powell.
“I have the right to demote him, I have the right to fire him,” he said in a June interview with Fox Business.
Trump named Powell, an investment banker, in late 2017 to succeed Janet Yellen as chair of the Fed, the world’s most powerful central bank.