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Addressing the Fed’s Future

Fed Chair Jerome Powell had a one-word answer to a question on whether he would resign if President Trump asked him to. "No," Powell said when he was asked if he would step down at the president's request, during a panel discussion in Atlanta hosted by the American Economic Association. He participated in this discussion with other past Fed Chairs Janet Yellen and Ben Bernanke.

In December, the Federal Reserve announced its final rate hike of 2018, raising interest rates to 2-1/4 to 2-1/2 percent. The market was expecting this rate hike which is the ninth one since 2015 as the Fed unwinds its policies put in place to address the financial crisis a decade ago.

President Trump, who had named Jerome Powell as Fed Chair in February 2018, had appealed to the Committee to hold the rate hike. In August he had told Reuters that he was not "thrilled" with the Fed raising interest rates.

“You have to understand, we're fighting some trade battles and we're winning. But I need accommodation too," said President Trump, referencing ongoing negotiations with China.

In public comments, Powell had remained firm that the hikes were needed and necessary. “Sound policymaking is as much about managing risks as it is about responding to the baseline forecast,” he had said.

According to Politico, while Powell has been repeatedly criticized by President Trump for the central bank's campaign of steady rate hikes, the Fed chairman has said there has been no direct contact between him and the president in recent months. Still, he said he would be open to meeting with Trump. “Meetings between presidents and Fed chairs do happen,” he said. “Nothing has been scheduled.” And the President might not have the authority to remove the Fed Chief either, according to Steven Mnuchin, Treasury Secretary. The president can remove a member of the Fed board only “for cause,” which does not include policy disagreements.

About Author: Radhika Ojha

Radhika Ojha is an independent writer and editor. A former Online Editor and currently a reporter for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.

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