After a boring half-hour conference, where the President of the American Federal Reserve (Fed), Jerome Powell, commented, Thursday, November 7, on the quarter-point drop in the monetary institution’s key rates – decided as planned by the American central bank – the question has finally been asked: will you resign if President Donald Trump asks you to? Answer : « Non. » Does he have the right? « Non »continued Mr. Powell dryly, specifying that it was not “not permitted by law”.
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Thus, the head of the Fed asserted his independence, two days after the triumphant election of Donald Trump. During his first term, the Republican president had explored the possibility of dismissing Mr. Powell – a moderate Republican whom he had appointed in 2018 – and he declared again recently that he would like to have a say in politics monetary policy of the United States.
Legal experts believe that Donald Trump cannot fire the chairman of the Fed without serious cause. His term runs until 2026 while he is appointed to the institution’s board of governors until 2028. During the term that Donald Trump will inaugurate on January 20, 2025, only one seat expires on this board. Even if he can appoint a new president, the Republican will not have the possibility of reshaping the council, part of which is made up of professionals from regional central banks.
This Thursday, asked about the risks of interference from the president, Mr. Powell, decidedly not very talkative, replied: “I’m not going to address any political issues today. »
Allow yourself a few quarters of respite
To be beyond reproach and to give no leverage and no pretext to Donald Trump’s predictable attacks, Jerome Powell remained as technical as possible, refusing to pronounce the name of the president-elect. However, the latter’s policy, which has promised to lower taxes and introduce a customs duty on imports of at least 10%, can accentuate the country’s budget deficit and revive inflation.
Response from the Fed boss: “In the short term, elections will have no effect on our policy decisions [monétaire]. Beyond that, we do not know what the timing and content of policy changes will be. We therefore do not know what the effects will be on the economy, and whether and to what extent these policies will impact the achievement of our goals of maximum employment and controlled inflation. We don’t make assumptions. We are not speculating. »
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