Federal Reserve Chairman Jerome Powell reiterated on Wednesday that he would serve out his full four year term, despite continued criticism from President Donald Trump—the man who appointed him.
In testimony on Capitol Hill, the Fed chief was asked by Representative Maxine Waters (D-CA) if he’d heed a theoretical call by Trump to step down. The president has been Powell’s harshest critic, and in recent days hinted about his authority to demote or fire him.
“If you got a call from the President, today or tomorrow, and he said ‘I’m firing you, pack up,’ what would you do?” Waters asked Powell on Wednesday.
“Of course I would not do that,” Powell responded, and went on to say, “The law clearly gives me a four year term and I fully intend to serve it.”
‘Not going to bow down’
Just last month, Trump told NBC’s Meet the Press “I don’t think [Powell] has done a good job,” and that he has the authority to fire him if he wants to, but also denied explicitly threatening Powell’s job.
Yet as many market observers have noted, the president does not have the explicit legal authority to fire a Fed Chairman. The Federal Reserve Act allows for Fed governors to be removed — but only “for cause” and not policy differences.
Waters, who chairs the House Financial Services Committee, told Yahoo Finance that her intent in asking the question was to “get rid of any uncertainties in the markets and with Wall Street about what is going on.”
She added that members of Congress “have been very much pleased with Powell and the way that he's conducted himself, but I wanted him to reiterate here that he was not going to bow down to the president.”
The congresswoman, a relentless Trump critic, also stated that “the president doesn't have the authority to fire [Powell], and should he be asked to go he's not going anywhere,” she said.
“I think that that increases the certainty about the fact that he's going to continue with his efforts to maintain independence,” Waters added.
In any event, Trump may get his desire for rate cuts, with Powell strongly suggesting in his testimony that the Fed would soon cut rates to safeguard the expansion.
—Yahoo Finance’s Jessica Smith contributed to this article.
Calder McHugh is an Associate Editor at Yahoo Finance. Follow him on Twitter: @Calder_McHugh.