By Michael S. Derby
NEW YORK (Reuters) – Federal Reserve Chair Jerome Powell said on Wednesday he is not worried the incoming administration will undermine him as U.S. central bank leader through the people it nominates to Fed leadership ranks.
In terms of dealing with a so-called shadow Fed chair, Powell said “I don’t think that’s on the table at all,” while speaking at a New York Times (NYSE:NYT) event.
The Fed leader was addressing a question about an idea broached by Scott Bessent, named by President-elect Donald Trump to be Treasury Secretary, that speculated about naming a Fed governor understood to be a successor to Powell, whose term as Fed chair ends in May 2026. Trump has long had fractious relations with the Fed and Powell and could seek to take greater control of the central bank, which is independent by law, subject to the oversight of Congress.
Any attempt to undermine Powell’s authority could rattle markets and undermine public confidence in the central bank’s work.
Powell said at the event that when it comes to his relations with the incoming administration, “it’s going to be fine.”
“There’s a set of institutional relationships between the Fed and every administration,” Powell said, noting “I fully expect that we’ll have the same general kinds of relationships” with incoming Trump policymakers.
“There’s got to be trust and mutual respect and acknowledgement of the different authorities and boundaries that we have,” Powell said of how the Fed interacts with other parts of government. That’s because “in times of crisis, we work much more together under the law.”
