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Federal Reserve Chair Jerome Powell said Wednesday he has not spoken to President Donald Trump since the newly inaugurated president told business leaders he would demand the central bank lower interest rates.
Speaking after the Fed’s decision to hold interest rates steady, Powell said he has had “no contact” with the president since Trump’s remarks last week.
“I’m not going to have any response or comment whatsoever on what the president said. It’s not appropriate for me to do so. The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals and really keeping our heads down and doing our work,” Powell said Wednesday.
The Federal Reserve is designed — since its founding in 1913 — to make interest rate decisions independent of pressure from elected officials. However, Trump in his first term as president was unusually vocal with his opinions on what the central bank should do. His remarks during the 2024 campaign and since his election victory have pointed to that continuing in his second stint in the White House.
“I’ll demand that interest rates drop immediately,” Trump said during a virtual appearance before the World Economic Forum in Davos, Switzerland, last week. “And likewise, they should be dropping all over the world. Interest rates should follow us all over.”
Powell was originally nominated to be Fed chair by Trump, taking over the position in 2018. He is now in his second term in the position, which runs through May 15, 2026.
Powell has said that he would not resign from his position if asked by Trump and that he believes the president removing or demoting the Fed chair is “not permitted under the law.”
Wednesday’s interest rate decision was the first since Trump returned to the White House. The Fed had cut its benchmark interest rate in three previous meetings by a cumulative total of 1 percentage point. Inflation readings are still above the central bank’s 2% target.