With Trump returning to the White House next year, this Republican politician may introduce new faces to the American political scene. His return also suggests that some key figures from the Biden administration may leave, including the head of the central bank of the world's largest economy—Federal Reserve Chairman Jerome Powell.
Of course, as an entrepreneur, Trump is known for his unpredictability. Whether he will fulfill his previous promises after taking office remains to be seen.
<h2>Possible Departure: Jerome Powell</h2>
During his campaign in February this year, Trump stated that if he is elected in November, Federal Reserve Chairman Powell will lose his job. When asked if he would reappoint Powell as Fed chairman, Trump bluntly replied, &#34;No way,&#34; adding that Powell had &#34;failed&#34; to control inflation.
Trump also accused Powell and the Federal Open Market Committee (FOMC) of being &#34;politically biased,&#34; although the FOMC has repeatedly denied this. In February, Trump claimed that Powell might lower interest rates to &#34;help the Democrats&#34; win. By July, as the Fed had not lowered interest rates, Trump changed his tune, saying he would keep Powell in his position until the end of his term in May 2026, &#34;especially if I think he is doing the right thing.&#34; In September, the Fed finally cut rates, and the reduction was unexpectedly doubled from expectations, reaching 50 basis points.
Powell was actually nominated by Trump in 2017 and first became Fed chairman in 2018; he responded calmly to attacks from Trump and his campaign partner JD Vance. Powell and his colleagues reiterated that the Fed is not a political institution and operates independently under federal law.
Chicago Fed President Goolsbee stated in August, &#34;Everything the Fed does is based on the Federal Reserve Act, pursuing maximum employment and price stability, and decisions are made based on that. That is our duty.&#34; He pointed out that the Fed's meeting minutes are public, and anyone can check them to understand the remarks of each official, emphasizing that policy-making is not influenced by elections but solely concerns economic conditions.
So, what can the U.S. president do regarding the Fed, and what can't he do? Will Powell lose his job if Trump is re-elected?
<h2>Appointing Fed Officials</h2>
The president's most direct power over the Fed is to appoint individuals to fill vacancies on the Board of Governors, including the chair position. The term for a Fed governor is 14 years, while the chair's term is 4 years. All of these individuals are members of the Federal Open Market Committee (FOMC), responsible for participating in the formulation of monetary policy such as interest rates.
Powell succeeded current Treasury Secretary Yellen as Fed chairman in 2018. Trump's appointment of Powell broke the historical precedent of &#34;continuing&#34; with a Fed chairman chosen by the previous president. Biden reappointed Powell as Fed chairman in 2021.
Powell's current term as chairman will expire in 2026. If he continues to serve, the next term may not last 4 years and could end in 2028, as his term as a Fed governor (the chair is also a governor) will expire in 2028
According to relevant U.S. laws, he will not be eligible to serve as a governor again. However, the Federal Reserve Act states that &#34;members of the Board shall continue to serve until their successors are appointed.&#34; Therefore, if the U.S. president at that time does not appoint a new governor, Powell may continue to serve.
The next U.S. president will have two opportunities to appoint new Federal Reserve governors in 2026 and 2028. This represents a small proportion of the 12-member FOMC, which consists of Federal Reserve governors and rotating voting members. The regional Federal Reserve Bank presidents are not appointed by the president but are elected by their respective boards and approved by the Board of Governors.
In addition, the Federal Reserve governors, chair, and vice chair appointed by the president must be confirmed by the Senate, a process that can serve as a review of the candidates. Due to strong opposition from Senate Republicans, Biden had to withdraw his initial nominee for the vice chair of supervision, Sarah Bloom Raskin, from the nomination process in 2022. Legislative opposition also doomed some of Trump's Federal Reserve appointees.
<h2>Removing the Federal Reserve Chair</h2>
The most severe and direct way for the U.S. president to address the Federal Reserve is to remove the Federal Reserve chair, as Trump threatened to do in 2018 when he was angry with Powell over a series of interest rate hikes. However, legal scholars indicate that the president cannot easily do this, or may not be able to do it at all.
Section 10 of the Federal Reserve Act states that members of the Board (including the chair) can be &#34;removed by the president for cause.&#34; Legal scholars generally interpret &#34;for cause&#34; as serious misconduct or abuse of power.
However, Peter Conti-Brown, a professor at the Wharton School of the University of Pennsylvania and a historian of the Federal Reserve, stated that whether the president can remove the Federal Reserve chair is very ambiguous, as the law does not clearly specify &#34;for cause&#34; protections for the position (i.e., that removal can only occur for specific reasons). In any case, due to the &#34;for cause&#34; protections for Federal Reserve governors, even if the chair is removed, he can continue to remain on the Board and can continue to serve as the chair of the FOMC responsible for setting interest rates. This is because the FOMC chair is chosen by Board members rather than the president.
<h2>Revising the Federal Reserve Act, Public or Private Pressure</h2>
The long-term plan to reshape the Federal Reserve may also involve modifying the laws that created the Federal Reserve, which requires action from Congress. The conservative think tank Heritage Foundation has called for reforms to impose more restrictions on how the Federal Reserve formulates monetary policy and regulates the largest banks in the U.S. For example, it has suggested changing the Federal Reserve's dual mandate of inflation and employment to focus solely on inflation.
Pressure for the Federal Reserve to make changes also comes from other sources. Bipartisan lawmakers are pushing for increased transparency in the Federal Reserve system. Environmental and consumer rights groups are also lobbying the Federal Reserve to take more action to address the risks that climate change poses to the financial system. Some advocate for the Federal Reserve to prioritize the employment aspect of its dual mandate, arguing that interest rate hikes could harm vulnerable workers
Additionally, whether Democrats or Republicans, U.S. presidents have attempted to publicly or privately pressure the Federal Reserve. Historically, presidents have personally expressed dissatisfaction and may even resort to some form of personal intimidation.
In 1965, former President Lyndon Johnson summoned then-Federal Reserve Chairman William McChesney Martin Jr. to his farm in Texas to condemn his decision to raise interest rates. In the 1970s, former President Richard Nixon pressured then-Federal Reserve Chairman Arthur Burns, with some economists believing that this led the Federal Reserve not to take strong measures to curb inflation at that time. As president, Trump even publicly criticized the Federal Reserve and Powell for a series of interest rate hikes during his term.
Powell has repeatedly emphasized that the Federal Reserve operates independently of politics and considers only the factors most beneficial to the economy when making policy. However, there is still a widespread belief that the Federal Reserve operates within a political context. The Federal Reserve leadership works closely with the Treasury Department and spends time building relationships with lawmakers on Capitol Hill. The Federal Reserve's decisions must take into account the economic impacts of presidential and congressional decisions, such as tax cuts or large-scale spending plans.
Historian Conti-Brown stated that the Federal Reserve's financial regulatory decisions sometimes consider feedback from various political factions. “The Federal Reserve is actually a very political institution,” Conti-Brown said, but “politics and partisan disputes are completely different.”

With Trump's potential return to the White House, the position of Federal Reserve Chairman Jerome Powell faces uncertainty. Trump has stated that if elected, he would not reappoint Powell, blaming him for failing to control inflation. Although Powell was nominated by Trump, he and the Federal Reserve reaffirmed their independence, emphasizing that policy-making is not influenced by politics. Trump's attitude has changed after the interest rate cut, indicating that he might allow Powell to continue serving until 2026

- As Trump prepares for a potential return to the White House, significant changes in U.S. economic leadership may follow, including the possible departure of Federal Reserve Chair Jerome Powell.  
- Trump has previously stated he would not reappoint Powell, criticizing his handling of inflation and suggesting political bias within the Fed, although Powell maintains the Fed's independence.  
- The next president will have the opportunity to appoint new Fed governors, impacting monetary policy, while the legal framework surrounding the dismissal of a Fed chair remains ambiguous.

Will Powell "lose his job"? The days of the Federal Reserve being criticized every day are back