I received’t stop if Trump asks me to go away, says Fed chief

The chairman of the Federal Reserve has said he would refuse to resign if Donald Trump asked him to step down. 

Jerome Powell told reporters it would be unlawful for any President to fire him, following speculation that Mr Trump could look to replace the Fed chairman following his victory. 

Mr Trump has previously suggested he would like to set interest rates himself and reports earlier in the year said aides had drawn up plans to oust the Fed chairman to give the President a greater say in monetary policy.

Mr Powell was speaking to reporters in Washington after the Fed cut interest rates by 0.25 percentage points to a target range of 4.5pc to 4.75pc in an early boost for Mr Trump. 

Inflation and interest rates were a key issue in the election and were cited as a key factor in Kamala Harris’s defeat. 

When pressed by reporters on whether he would step down if asked to, Mr Powell simply said: “No.” 

In response to further questions about what legal mandate the President would have to demote him, Mr Powell said it was “not permitted under the law.”

Hours earlier CNN had reported that Mr Trump was prepared to let Mr Powell see out his term ending in May 2026, citing an anonymous senior advisor to the President elect.

Mr Trump’s public comments on the matter suggest he desires a role in setting US interest rates. He told reporters in August: “I feel the president should have at least [a] say in there… I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than in many cases, people that would be on the Federal Reserve or the chairman.”

The Wall Street Journal reported in April that aides had drawn up a range of proposals for how monetary policy could be run in a second Trump administration, including rolling back the independence of the central bank and ousting Mr Powell.

Mr Powell was originally appointed by Mr Trump to head the Federal Reserve during his first term as President. However, the Republican has been critical of Mr Powell’s leadership since then.

He accused the chairman of having “no guts, no sense, no vision” in 2019, claiming he was not cutting interest rates fast or far enough. Mr Trump has previously also questioned whether Mr Powell was a “bigger enemy” to the US than China’s leader Xi Jinping. 

The Fed’s decision to lower interest rates for the second meeting in a row came despite speculation that Mr Trump’s policies may stoke inflation. The Republican campaigned on a promise to introduce aggressive tariffs, which would likely push up the cost of imported goods from China by 60pc if implemented.

Bank of England Governor Andrew Bailey warned that Trump’s plans to vastly increase import taxes risked splintering global markets, saying tariffs spur a “fracturing of the world economy”. 

He told LBC: “If the world becomes more closed the cost of trade goes up – protectionism, that’s not a good thing.” 

Mr Powell said it was too early to tell what the impact of Mr Trump’s election would be on the economy. He said: “In the near term, the election will have no effects on our policy decisions. We don’t guess, we don’t speculate, and we don’t assume.”

The S&P 500 stock index and the tech heavy Nasdaq were both higher in the wake of the Fed’s announcement, putting them on course for another record close following a Wall Street surge on news of Mr Trump’s victory. 

Mr Trump is returning to the White House at a time of falling borrowing costs and Mr Powell left the door open for another interest rate cut in December. 

He told reporters: “We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labour market can be maintained with inflation moving sustainably down to 2pc.”

Read the latest updates below.