The chair of the Federal Reserve made clear he would not resign, even under pressure. But pressure from the White House is likely, market watchers say.
Powell pushes back
Jay Powell and the Fed may have pulled off the improbable soft landing in taming inflation while not crashing the economy into recession, proving many a Wall Street naysayer wrong.
But an even bigger wildcard looms in another Donald Trump presidency — what Trump 2.0 might mean for interest rates, Fed independence and the Fed chair’s own job.
That tension burst into the open at the Fed’s news conference on Thursday. The usually dry event had moments of high drama that nearly overshadowed the decision to cut the benchmark lending rate by a quarter percentage point. Powell delivered a forceful “no” when asked by Victoria Guida of Politico if he would consider resigning if Trump asked.
He delivered a more emphatic response when pressed by another reporter on whether the president had the legal authority to fire him. “Not permitted under the law,” Powell said.
Trump has made waves by saying that a president should have a say in rates policy. And suggestions have circulated from inside the president-elect’s camp that he would sideline Powell if re-elected — something Trump flirted with during his first term after appointing Powell in 2017.
The S&P 500 advanced as the news conference wore on, closing at another record, and Treasury bonds also rallied.
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Source: Elections - nytimes.com
