Trump Would not Reappoint Jerome Powell as Fed Chief

Former President Donald Trump, the Republican frontrunner in the 2024 presidential race, declared his intention to replace Federal Reserve Chair Jerome Powell if elected. In an interview with Fox Business, Trump expressed concerns about Powell’s potential actions and their impact on the economy.

“No, I wouldn’t,” Trump stated when asked about reappointing Powell, whose second term expires in 2026. He accused Powell of potentially lowering interest rates to benefit President Biden’s re-election chances, stating, “I think he’s going to do something to help the Democrats if he lowers interest rates.”

Trump’s remarks come amidst Wednesday’s announcement by the Fed that they wouldn’t raise interest rates further, signaling a potential future cut if inflation falls to their 2% target. This aligns with their previous stance, but contradicts Trump’s perception of their motives.

While initially appointing Powell in 2017, Trump’s relationship with the Fed Chair soured within months. He frequently criticized Powell for raising interest rates, particularly during the 2018 stock market decline and concerns about a potential recession.

Trump’s concerns extend beyond monetary policy, encompassing the potential for rising inflation due to Middle Eastern tensions. He warned of “massive inflation” if oil and energy prices rise due to attacks on shipping vessels in the Red Sea, a crucial shipping lane. These attacks have disrupted trade, potentially causing longer routes and higher costs.

Trump’s stance against Powell and his focus on inflation raises questions about his economic policies if elected. While the Fed’s independence is crucial, its potential intervention could impact financial markets and economic stability. The coming months will reveal how these concerns and pronouncements translate into concrete actions, shaping the economic landscape of the 2024 presidential election.

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