(USNewsBreak.com) – Former President Donald Trump nominated Jerome Powell to serve as chair of the US Federal Reserve, the central bank of the United States, in 2017. In May 2022, Powell took his oath of office for his second term. If Trump ends up back in office, he says he would drop the chair in favor of someone else.
The US Federal Reserve chair position is not a political one, but Trump has recently expressed a belief that Powell is. During an interview on “Mornings with Maria,” the former president claimed that it appeared the chair was “trying to lower interest rates for the sake of maybe getting people elected” and that he would “probably help the Democrats.”
— New York Post (@nypost) February 2, 2024
Trump’s statements came on the heels of the Fed revealing that it had no plans to start reducing interest rates next month. They have steadily increased since March of 2022 in a bid to help the economy recover from the 2020 health emergency. Currently, the rates sit at 5.25% to 5.5%, where they are expected to stay for the immediate future. That’s a significant increase from the 150-point drop of March 2020, when the rates were 0% to 0.25%.
When asked about involving politics in the decision to drop interest rates last December, Powell said, “We don’t think about politics.” Instead, he said the board considers “what’s the right thing to do for the economy,” according to POLITICO. He also said he doesn’t dwell on whether he’ll serve a third term, instead focusing on the here and now. The Fed did not comment on Trump’s current statements.
Often, when the Fed rate increases, the stock market suffers, and when it decreases rates, the stock market goes up, though there’s no surefire way to predict its reaction. The stock market has remained steady during President Joe Biden’s tenure, though Trump commented that any success is because people anticipate his re-election.
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