Jerome Powell addresses concerns Federal Reserve will lose independence under Trump

Federal Reserve Chair Jerome Powell is "not concerned" for the US bank losing independence despite Trump's suggestion he should have input into interest rates.

Washington, DC - Despite Donald Trump's prior suggestion that he should have input into interest rate decisions, Federal Reserve Chair Jerome Powell said Wednesday that he was "not concerned" about the US central bank losing its independence.

Jerome Powell speaks onstage during The New York Times Dealbook Summit 2024 at Jazz at Lincoln Center on Wednesday in New York City.
Jerome Powell speaks onstage during The New York Times Dealbook Summit 2024 at Jazz at Lincoln Center on Wednesday in New York City.  © Eugene Gologursky/Getty Images for The New York Times/AFP Eugene Gologursky / GETTY IMAGES NORTH AMERICA / Getty Images via AFP

"I'm not concerned that there's some risk that we would lose our statutory independence because I do think that those set of ideas are strongly believed by people," Powell said, speaking at The New York Times' DealBook Summit.

Trump has said he would like "at least" a say over setting the Fed's interest rate, although this runs against the bank's mandate to act independently of Congress and the White House in tackling inflation and unemployment.

On Wednesday, Powell also shrugged off a suggestion by Trump's Treasury secretary nominee Scott Bessent of choosing a shadow Fed chair that would dilute his influence.

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"I don't think that's on the table at all," Powell said.

He added that he expects to have the same general types of institutional relationships with the incoming administration as before – including with the Council of Economic Advisers and Treasury Department.

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Powell also noted that the US economy remains strong, adding that the central bank "can afford to be a little more cautious" as it looks to lower interest rates.

But policymakers will base their decisions on what is happening in the economy now, rather than uncertain factors such as potential tariffs – which President-elect Trump has threatened on trading partners.

On the US federal budget, Powell said he believed it was on an "unsustainable path" even if debt was not at an unsustainable level.

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"We know that we have to change that," he said, adding that this has to be done "sooner, better than later."

He also said that he did not see Bitcoin as a competitor to the dollar.

The next Fed policy meeting is set to be held on December 17 and 18.

Cover photo: Eugene Gologursky/Getty Images for The New York Times/AFP Eugene Gologursky / GETTY IMAGES NORTH AMERICA / Getty Images via AFP

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