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False expectations: Trump nominated Powell in 2017
Photo: Carlos Barria / REUTERS
Former US President Donald Trump does not want to give Federal Reserve Chairman Jerome Powell another term if he returns to the White House. He would not reappoint Powell if he wins this year's presidential election in November, Trump told the Fox Business television show in an interview that aired on Friday.
Trump is currently far ahead in the Republican primaries. However, this is all about support from the Republican ranks.
Powell's second four-year term as Fed chief expires in 2026. Trump said he believes Powell will cut interest rates to improve Democratic incumbent Joe Biden's re-election prospects. Trump once brought Powell into office, but repeatedly criticized him heavily for his allegedly too tight interest rate policy.
No interest rate turnaround anytime soon
However, there is currently no talk of interest rate cuts. According to the latest figures, the US labor market is very robust, which, from the Fed's perspective, poses some challenges: A robust job market and rising wages mean additional inflation risks. “Against this background, the probability that the US Federal Reserve will initiate a change in key interest rates at its next meeting in March drops to zero,” says analyst Elmar Völker from Landesbank Baden-Württemberg.
On Wednesday, the Fed kept its key interest rates stable, as widely expected, and dampened expectations of imminent interest rate cuts. Fed chief Jerome Powell had said that more confidence was needed that inflation would decline sustainably. He described monetary policy easing as early as March as unlikely. Rather, the central bank will probably initiate the interest rate turnaround “at some point” this year.
mamk/Reuters/dpa-AFX