Powell commits to full term as Fed chair amid speculation over future

Powell Full term: Federal Reserve Chair Jerome Powell confirmed on Monday his intention to remain in his position until his term expires in 2026, countering claims from some supporters of former President Donald Trump that Powell would be ousted if Trump returns to the White House.

Speaking at an event, Powell was asked whether he plans to complete his term as Fed chair. He responded simply, "Yes."

Powell's statement could set the stage for renewed tension between him and Trump if the Republican wins the upcoming presidential election. The relationship between Trump and Powell was notably strained during Trump's presidency due to disagreements over interest rate hikes.

Appointed to the Fed Board of Governors by former President Barack Obama, Powell was later chosen by Trump to lead the central bank in early 2018. However, Trump quickly turned critical of Powell, particularly over the Fed's interest rate increases, even contemplating firing him—an action Trump ultimately decided he could not legally execute.

During President Joe Biden's administration, the criticism of Powell subsided, contrasting sharply with Trump's frequent threats to remove him from his post.

When asked about the possibility of serving another term if reappointed by a future president, Powell declined to comment. Trump has explicitly stated he would not reappoint Powell and some of his allies predict Powell would leave shortly after a potential second Trump term begins.

Steve Bannon, a former Trump strategist, and Peter Navarro, a former trade adviser to Trump, both currently serving prison sentences related to their refusal to cooperate with the congressional investigation into the January 6 Capitol attack, have speculated that Powell would resign or be removed early in a new Trump administration.

Despite these assertions, Powell's recent comments suggest otherwise. Reports indicate that Trump allies are drafting proposals to diminish the Federal Reserve's independence, including potential plans to involve Trump in interest rate decisions and authorize him to remove Powell before his term ends.

Another conservative group, associated with the Heritage Foundation, is also working on initiatives to limit the Fed's power under a second Trump administration. However, Trump has distanced himself from these Project 2025 initiatives.

Trump has previously accused Powell of manipulating interest rates to favor President Biden's re-election chances. With inflation easing, financial markets are anticipating possible rate cuts at the Fed's September meeting, just weeks before the November election. Powell reiterated that the Fed does not consider political factors in its decisions.

Opening his remarks on Monday, Powell condemned the recent assassination attempt on Trump, calling it a "sad day for our country" and wished the former president well. He emphasized, "We don't take political considerations into account. We don't put up a political filter on our decisions."