Federal Reserve Chair Jerome Powell may be a Republican, but the top four candidates vying to become his party’s standard-bearer are promising to put him out of a job if they are elected president next year.
Powell was initially nominated to his role by Donald Trump but the then-president proceeded to turn on him almost as soon as he was confirmed to lead the central bank. Powell once served as an official in the George H.W. Bush administration but has nevertheless become a lightning rod for the conservative wing of the GOP ever since.
Now as the 2024 field takes further shape, most of Trump’s rivals have joined in on attacks of Powell to the point where the top four candidates have unequivocally said in recent days that they would look elsewhere when Powell’s term expires in 2026.
“I would not reappoint him. I thought he was always late, whether it was good or bad, but he was always late,” Trump himself said during a Fox Business interview last week.
The Federal Reserve and inflation are sure to receive the political spotlight Wednesday night when the leading Republican candidates — minus Trump — gather for their first debate of the election season. Powell could be among the host of issues on tap, which range from the four indictments of Donald Trump to abortion to other economic concerns like Social Security and trade with China.
Powell himself will also speak Friday at the central bank’s annual economic symposium in Jackson Hole, Wyo., where he is expected to frame the next steps in his fight against inflation.
Where other candidates stand
As the public face of the Fed’s campaign to curb price increases, Powell has been the target of criticism from both sides of the aisle. Critics from the right often contend that Powell and his colleagues kept rates too low for too long, fueling a spending spree that led to soaring prices in recent years.
Former New Jersey Gov. Chris Christie has echoed that criticism, saying in a Bloomberg Television interview last month: “I think that [Powell] probably should have started tightening sooner than he did. I think he waited too long on that.”
But Christie declined to go as far as his fellow contenders, saying he would consider keeping Powell in his role after 2026. “I don’t have anything that I think Jay has done horribly wrong,” he said.
Committee ranking member Sen. Tim Scott (R-SC) is seen on a screen as Federal Reserve Board Chairman Jerome Powell testifies during a hearing before Senate Banking, Housing, and Urban Affairs Committee in June. (Alex Wong/Getty Images) ·Alex Wong via Getty Images
Sen. Tim Scott (R-S.C.) is another candidate who has weighed in. On Capitol Hill, Scott is the ranking member of the Senate’s Banking, Housing, and Urban Affairs Committee, which oversees the Federal Reserve. He voted for Powell’s renomination last year. But in a recent hearing, Scott was critical of some aspects of Powell’s response to the recent banking unrest, pointing to "a supervisory failure" as one reason for the recent turmoil.
Nonetheless, the more nuanced assessments from Christie and Scott come from candidates who are both below 4% in most recent national polls. The higher-polling figures are now in lockstep on the idea that Powell needs to go.
Meanwhile, the current occupant of the White House has emphasized maintaining the Fed’s independence. President Joe Biden, after nominating Powell for a second term in 2021, confirmed that he intended to stay out of the Fed’s way.
"My plan to address inflation starts with the simple proposition: Respect the Fed, respect the Fed’s independence, which I have done and will continue to do," Biden said last June, while inflation was peaking.
'A referendum on the proper role of our central bank'
While the Fed operates independently of the White House, inflation is at the forefront of many voters' and investors' minds these days, transforming the often arcane world of Fed policy and personnel into a buzzy topic in the political sphere.
Another oft-discussed campaign trail idea would be to roll back some of the Fed’s independence. Former President Trump has regularly discussed increasing presidential power over the federal bureaucracy during this campaign.
While Trump has remained vague on the question of whether the Fed would be included — and representatives for his campaign didn’t respond to a request for clarification — Trump has promised to "conduct a top-to-bottom overhaul of the federal bureaucracies to clean out the rot and corruption of Washington D.C."
President Donald Trump shakes hands with Jerome Powell after announcing him as his nominee for the next chair of the Federal Reserve in 2017. (Alex Brandon/AP Photo, File) ·ASSOCIATED PRESS
Entrepreneur Vivek Ramaswamy has been more direct, recently discussing an idea to cut 90% of the staff at the Fed and writing in a Wall Street Journal op-ed earlier this year that "I intend to make the 2024 presidential race in part a referendum on the proper role of our central bank."
Yet another front in the debate is the Fed's dual mandate to focus both on maximum employment and stable prices.
Former Vice President Mike Pence has long said the central bank needs to abandon that idea and focus solely on inflation. In 2011, while in Congress, Pence even authored a one-page bill to that effect.
"I think we’ve got to get the Federal Reserve back to doing its job," Pence said at a CNN town hall in June. It’s an idea that has been echoed by other candidates like DeSantis and Ramaswamy.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Ben Werschkul is a Washington correspondent for Yahoo Finance.
