The first step in stock trading is to open a stock account. Following the nomination of hedge fund giant Scott Bessent by the then President-elect Trump as the next Treasury Secretary, speculations about Federal Reserve Chairman Powell possibly being forced to resign early have been rampant. On Tuesday of this week, Bessent clearly stated in an interview that Powell could still complete his remaining term after Trump’s administration took office, providing a reassurance to the market.
“Powell will complete his term,” became a focal point after Trump won the election last month. Despite the tense relationship between Trump and Powell, Trump had already indicated to the media over the weekend that he might not attempt to remove the Federal Reserve Chairman. “As the President said on Sunday, I completely agree with his view, Jay Powell will complete his term,” Bessent told CNBC after meeting with Idaho Senator Mike Crapo on Tuesday.
Bessent’s remarks contrasted with his previous proposal of a ‘shadow chairman’ for the Federal Reserve. Before the election, Bessent had suggested the idea of having a ‘shadow chairman’ to lead the Federal Reserve. He stated that Trump could nominate the next Federal Reserve Chairman in advance, establish a ‘shadow’ chairman to provide their own policy forward guidance to the market, thereby marginalizing Powell’s role, so that ‘no one would care what Powell has to say.
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Over the weekend, when Trump was asked if he would replace the Federal Reserve Chairman, he directly replied: “No, I don’t think so.” When asked if he would ask Powell to step down, he answered: “No, I don’t know.” He also claimed that Powell might ‘be told’ to step down, but not ‘be asked’ to step down. However, Trump indicated that he currently has no plans to do so. In 2018, Trump chose Powell as the Federal Reserve Chairman, but their relationship deteriorated later in Trump’s term.
In 2022, President Biden reappointed Powell for another term, meaning his tenure as Federal Reserve Chairman will end in May 2026. Last month, at the Federal Open Market Committee (FOMC) meeting, Powell stated that the President of the United States has no authority to fire him, and he would not resign if Trump asked him to step down as the Federal Reserve Chairman. (Source: Caixin Global)
