Powell privately adamant that he will serve out his full term at the Fed

CNN

25-07-2025

Federal Reserve Chair Jerome Powell has told multiple associates and allies that there's no chance he will bow to President Donald Trump's calls for him to resign, vowing to withstand several more months of the president's unprecedented, multi-pronged assault over Powell's refusal to lower interest rates.
The top central banker has privately argued that he must stay put for more than just personal reasons — the fate of his chairmanship is now linked with that of the Fed's overall independence, according to people familiar with the discussions. He has said that stepping down now would undermine the institution's longstanding freedom from political interference.
'He feels very strongly that his responsibility is to maintain that independence,' said GOP Sen. Mike Rounds of South Dakota, who is among those who have personally questioned Powell over whether he might quit. 'I've asked him, and he says no, that would reduce the independence of the Federal Reserve.'
Powell's determination to serve out his term through May 2026 ensures he will remain the target of a White House-led attacks on the Fed, which has faced intensifying pressure to cut interest rates. That coordinated effort has put the central bank's traditionally staid decision-making under intense scrutiny — and raised fresh concerns about the potential economic consequences of meddling with monetary policy for political purposes.
A low-key economic expert who did a stint in the George H.W. Bush administration, Powell has earned a reputation over more than a decade at the Fed as studiously non-partisan 'straight shooter' who relies on reams of data to make decisions, according to people who worked with him. His detachment from day-to-day politics, despite what one of the people described as his moderately conservative learnings, helped Powell earn bipartisan support in the Senate when Trump nominated him to chair the Fed in 2017.
But the no-frills approach that appealed to Trump in his first term has since become yet another strike against the Fed chair. The president has repeatedly bristled at Powell's unwillingness to engage with his calls to cut rates. And Powell's generally stoic personality has done little to win Trump over.
'I think he's terrible,' Trump said earlier this month. 'It's like talking to a chair. No personality.'
Trump has ratcheted up his criticism in recent weeks, openly saying he hopes Powell resigns, accusing him of trying to damage his presidency and insulting him on a near-daily basis as 'stupid,' a 'numbskull' and 'truly one of my worst appointments.'
Those attacks have been regularly amplified by Trump aides and close allies, who at some points have spread unfounded rumors that the Fed chair's resignation was imminent. The White House in recent weeks has spent significant time spotlighting the price tag of a renovation project at the Fed, launching investigations into the cost overruns for the $2.5 billion project and suggesting it could be a fireable offense.
On Thursday, Trump sought to press the issue by traveling to the Fed to tour the construction, where Powell personally escorted him around. The Fed chair stood by as Trump advocated for rate cuts, at one point laughing awkwardly as the president slapped him on the back and said he'd 'love him to lower interest rates.'
'I just want to see one thing happen,' Trump said later. 'Interest rates have to come down.'
Despite the criticism, Trump reiterated that he has no plans to fire Powell — his advisers have warned that doing so would tank the financial markets and spark an economic crisis.
But Trump and his aides have instead sought to make Powell's tenure as painful as possible to undermine his credibility and potentially even drive him to quit.
Trump allies have homed in on the Fed's pricey renovation, viewing it as a particularly potent weapon. (Trump has pushed his own renovations at the White House, albeit on a much smaller scale.) Still, his allies argue that they can use the Fed project to increase public pressure on Powell by contrasting the hefty spending on the Fed headquarters with everyday Americans' struggles to afford homes — something they point out could be alleviated if the central banker would cut interest rates.
'Every day that Jerome Powell is in Washington is a gift to the president,' said one Trump adviser, who likened the pressure campaign to boiling a frog. 'Either Jerome Powell leaps or he boils.'
A Federal Reserve spokesman declined to comment for this article, pointing instead to Powell's prior public pledges to serve the entirety of his term.
Yet for all the furor coming from the White House, Powell has indicated to associates that he's keeping his head down. Publicly, he's remained solely focused on carrying out the Fed's work setting monetary policy without consideration of the political reverberations.
That approach appeared to pay off at least temporarily on Thursday, with Trump backing off his harshest rhetoric following a conversation with Powell during the Fed construction tour that he described as a 'very productive talk.'
'There's always Monday morning quarterbacks, I don't want to be that,' Trump said afterward, declining to criticize the renovations that he and his aides had previously described as a scandal. 'It got out of control, and that happens.'
The détente may not hold much longer, with the Fed widely expected to hold rates steady next week and delay any shift in policy until the fall. That decision is likely to infuriate Trump, who has fixated on cutting rates as a way to further juice the economy ahead of next year's midterm elections.
But in both private and public, Powell has shrugged off the political implications, emphasizing the need to stick solely to the economic considerations that have long guided the Fed.
'The best defense for the Fed is to get the policy right,' said Bill English, a Yale professor and former director of the Fed's division of monetary affairs. 'I feel sorry for the guy, but the best he can do at this point is hang tough and do the best job he can on monetary policy.'
Outside of Trump's orbit, Powell's resolve to finish his term has won praise from Democrats — including many who had previously criticized him during the Biden era when the Fed kept raising rates to try to combat a surge of inflation.
At the time, Powell's insistence on keeping rates higher for longer in pursuit of a so-called economic soft landing prompted consternation among some in the Biden White House and the broader Democratic Party who worried the approach would tip the country into a recession.
But former officials have since rallied around him, anxious over the potential fallout should Powell decide to leave.
'He's putting the integrity of the institution above himself,' said Jared Bernstein, who chaired the Biden-era Council of Economic Advisers. 'If I were a 72-year-old guy who's getting verbally abused by the president on a daily basis, retirement would look pretty good. But I really believe that Powell is engaged in protecting the institution.'
As for Republicans, some lawmakers wary of damaging the Fed's credibility have encouraged the White House to back off its criticisms, arguing that it'll benefit Trump more when Powell does begin lowering interest rates if it doesn't come amid a cloud of political pressure.
Yet until that message breaks through, they're putting their faith in Powell — and hoping he stays true to his word.
'The vast majority of the members of the Senate are smart enough to have been in contact with the markets, they've observed the markets, they know what an impact it would be on the markets should there be any inkling that the Fed was being coerced,' said Rounds, the Republican senator. '[Powell's] in the right position. He's got a very tough position, but I respect him for the position he's taken.'