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Your guide to what the 2024 US election means for Washington and the world
Donald Trump has said he will not seek to oust Federal Reserve Chairman Jay Powell before his term expires in May 2026, but has vowed to press ahead with sweeping tariffs, mass deportations and tax cuts in his first days in the White House.
In an interview with NBC News Meet the Press, Trump talked about his priorities for the world’s largest economy when his second administration begins in January, including cutting aid to Ukraine and reducing government overreach.
When asked if he planned to replace Powell, who was chosen by Trump in 2017 and later re-nominated by President Joe Biden for a second term at the head of the US central bank, the president-elect said he did not.
“I think he would tell him to do it. But if I asked him, he probably wouldn’t,” Trump added.
Since winning the US presidential election last month, concern concerns have grown across Wall Street and Washington that Trump will threaten the Fed’s independence, which is seen as critical to the stability of both the global economy and financial markets.
During the campaign, Trump appeared to suggest he would continue the attacks from his first term, in which he called Powell “the enemy” for resisting his calls for lower interest rates.
Trump has questioned whether he should have more direct influence over monetary policy decisions. Scott Bessent, his choice for Treasury secretary, also floated the idea of naming a successor to act as a “shadow” Fed chair, undermining the institution’s communications by issuing contradictory guidance on the policy outlook.
In the immediate aftermath of the election, Powell was adamant that he would not step down early even if the president-elect asked him to do so. He also told journalists that there are no legal grounds for his early dismissal.
Last week he added that “he is not worried” about the Fed’s independence during the second Trump administration, saying it was protected by “the law of the land.”
Economists are bracing for tension, however, given their expectations that Trump’s plans to impose tariffs on trading partners, deport large numbers of immigrants and boost growth with lower taxes and regulations will fuel price pressures, limiting how much the Fed can cut interest rates overall prices.
The Fed has already cut its benchmark interest rate twice since September and is poised to do so again later this month, but officials have begun to hint that the pace will slow in 2025.
Trump admitted he “can’t guarantee anything” in terms of higher costs for Americans if his tariff proposals are passed, though he denied they would weaken the economy. He also again praised such levies as a negotiating tool, saying it had “stopped the tariff wars”.
The president-elect also said he had “no choice” but to deport all illegal immigrants in the US. But he said he would work with Democrats on a plan for undocumented people who entered the country as children. He also promised to end birthright citizenship through executive action.
On his efforts to cut government spending, Trump said his administration would raise the age for entitlement programs such as Social Security or Medicare. “People will get what they get,” he said.
Those plans would likely be accompanied by a withdrawal of US involvement in surveillance, including aid to Ukraine as well as involvement in NATO, the president-elect said.
