Federal Reserve Board Chairman Jerome Powell speaks during a news conference on December 19, 2018 in Washington, DC. The US Federal Reserve raised the short-term interest rates by a quarter percentage point on Wednesday, the fourth increase of the year, and signaled two more hikes could come in 2019.
Mark Wilson | Getty Images
Federal Reserve Chair Jerome Powell’s job is safe — at least for the moment.
The Trump administration is making “no effort” to remove the central bank chief, top White House economic advisor Larry Kudlow said on Tuesday.
“I will say that unequivocally, at the present time, yes, he is safe,” the National Economic Council director said at CNBC’s Capital Exchange event.
President Donald Trump has repeatedly lashed out at Powell for the Fed’s interest rate hikes during the president’s tenure. He has urged the central bank to slash rates, which market watchers think it could do later this month.
As the president fumed about Powell, reports last month said the White House considered demoting or firing the Fed chairman. Trump later said he “didn’t ever threaten to demote him” but said he would “be able to do that if [he] wanted.”
After a Fed meeting last month in which the Fed held rates steady, Powell said he had no plans to leave the post.
“I think the law is clear that I have a four-year term, and I fully intend to serve it,” he said.
The Fed is an independent government agency that gets its authority from Congress.
A strong June jobs report raised questions about whether the Fed needs to cut rates at its meeting later this month. On Tuesday, Kudlow argued the central bank should look at low inflation rather than the strength of the economy when deciding whether to cut rates.
“I’m not so sure that the view I’ve expressed on price signals or the views the president has expressed is necessarily so far from where the Fed is,” he said.
He also called the Fed’s last rate increase in December “unnecessary.”
The central bank increased its benchmark federal funds rate seven times in 2017 and 2018 as it moved away from the near-zero levels deployed in the wake of the financial crisis. The Fed currently has a target rate in the range of 2.25% to 2.5%.