Fed cuts interest rates as expected, Chairman Powell declares he will not resign even if Trump asks
Fed Chairman Jerome Powell made his first remarks after the US had a new President, Mr. Donald Trump.
In the early morning of November 8, 2024, the US Federal Reserve (Fed) held a meeting on interest rate adjustment, with a new reduction of 0.25% to the 4.5-4.75% range.
This is information that financial markets have predicted in advance, especially after the first interest rate reduction in 4 years by the Fed in September.
The agency considered as the US central bank said that recent indicators show that the US economy is still growing at a moderate pace, while inflation is still gradually decreasing to the Fed's 2% target.
The Fed will continue to assess the unemployment rate, inflation rate, and other macroeconomic and financial factors for future interest rate adjustments. Federal Reserve officials still have one more meeting in 2024 on December 18-19, followed by a meeting in late January in 2025.
In a press conference later, Fed Chairman Jerome Powell announced that he had no intention of resigning after Donald Trump was elected as the new US President.
Under US law, the President does not have the power to fire or demote the Federal Reserve Chairman, but only to nominate and then wait for Senate approval. Mr. Powell was nominated by Trump to become Fed Chairman in November 2017 and approved by the Senate in February 2018.
Under Mr. Powell, US monetary policy has gone through a very volatile period during the COVID period of 2020 - 2022, with the money supply increasing four times, causing severe inflation and forcing the Fed to raise interest rates to the highest level in the past four decades to deal with it. The Fed has only cut interest rates for the first time in four years in the September adjustment.
However, Chairman Powell is still trusted by President Biden and allowed to continue running the Fed. Mr. Powell's current term will end in 2026.
In response to the press in October, Mr. Trump mentioned the possibility of intervening in the Fed's interest rate adjustment process as President. Mr. Trump is also likely to have measures to cut corporate taxes and increase tariffs on imported goods.
However, Chairman Powell stated that Mr. Trump's victory will not have much impact on the Fed's monetary policy, but the new administration's economic policies may force the Federal Reserve to make necessary adjustments to both ensure price stability and increase employment.
Bitcoin prices have reacted positively to the Fed's interest rate cut announcement, setting a new record high of $76,850, while US stock market indices have also skyrocketed.
