NEW YORK — Federal Reserve Chair Jerome Powell expressed confidence on Wednesday that President-elect Donald Trump will not attempt to politicize the central bank once he assumes office in January.
The issue of Fed independence has been raised in recent months amid concerns that Trump might seek to influence monetary policy through legislation or by appointing a “shadow chair” who could undermine Powell’s authority.
Powell reassured that safeguards in the congressional legislation establishing the Fed will help shield it from political interference. He emphasized the importance of independence, stating that it allows the Fed to make decisions in the best interest of all Americans without fear of reversal or political bias.
Regarding the near-term interest rate path, Powell did not disclose his stance but highlighted the Fed’s ability to proceed cautiously due to the strength of the U.S. economy compared to other major economies globally.
The Fed is set to announce its next rate decision in two weeks, with markets anticipating a 75% chance of a quarter-point rate cut by the Federal Open Market Committee. The expectation is for the Fed to skip the January meeting before implementing further cuts in 2025.
While Trump has previously criticized the Fed and Powell, advocating for presidential influence over interest rate decisions, Powell remains optimistic about maintaining the Fed’s independence. He cited strong bipartisan support in Congress for keeping the Fed’s decision-making separate from political pressures.
Powell expressed confidence in the legal framework protecting the Fed’s independence and downplayed concerns about potential risks to its statutory autonomy. The Trump transition team did not provide an immediate response to requests for comment.
