UPDATED: Powell says if president calls, orders him to step down, ‘of course, I would not do that’

Cites importance of 'degree of independence' for central bank

The chairman of the Federal Reserve Board said he would not step down if President Donald Trump ordered him to do so or declared he was fired from his position, the central bank leader told a House committee Wednesday.

Responding to a hypothetical question from House Financial Services Committee Chairwoman Maxine Waters (D-Calif.), Federal Reserve Board Chairman Jerome H. (“Jay”) Powell said “of course I would not do that” if Trump called him today (or tomorrow) and asked him to step down – or told him to get out of his office because he was fired.

“I can’t hear you,” Waters said, to laughter from the audience in the hearing room. “My answer would be no,” replied Powell.

“And you would not pack up and you would not leave,” she persisted.

“No ma’am,” Powell responded.

“And that’s because you don’t believe the president has the authority, is that why you would not leave,” Waters asked.

“I’ve kind of said what I intended to say on the subject,” Powell responded. “What I’ve said is that the law gives me a four-year term and I fully intend to serve it.”

“Okay, so I hope everybody heard that,” Waters added.

Earlier, at the beginning of his prepared testimony, Powell said that an “important degree of independence” is given to the Federal Reserve by Congress so that the central bank can work toward its goals of maximum employment and price stability based on objective analysis and data.

Powell also said the central bank acknowledges the obligation that independence brings.

“We appreciate that our independence brings with it an obligation for transparency so that you and the public can hold us accountable,” Powell said in his opening statement.

The comments were at the top of the chairman’s prepared testimony, even before he provided details on the central bank’s actions regarding monetary policy.

President Donald Trump has repeatedly criticized Powell, the Fed Board and the Fed’s rate-setting Federal Open Market Committee (FOMC) for not cutting interest rates. Most of Trump’s ire, however, has been focused on Powell – including reports that Trump wanted to demote Powell as chairman in favor of another board member. As in Wednesday’s hearing, Powell has repeatedly said the law is clear as to his position, and he intends to serve out the remaining years of his term.

On Tuesday, one of the president’s top economic advisers said Powell’s position is safe – for now. Larry Kudlow, director of the White House National Economic Council, said the Trump administration is making “no effort” to remove the central bank chief.

“I will say that unequivocally, at the present time, yes, he is safe,” Kudlow said at a Washington conference.

In other comments, Powell responded to a number of questions from committee members about the recently announced cryptocurrency initiative, called “Libra,” announced by social media giant Facebook. The rollout and process of addressing concerns about the product, Powell said, should be a patient and careful one – not a sprint to implementation.

However, Powell acknowledged the impact of the Libra proposal given the size and scope of Facebook worldwide. “If there were problems there, they would rise to systemically important levels just because of the mere size of the Facebook network,” he told the committee.

Chair Jerome H. Powell testimony: Semiannual Monetary Policy Report to the Congress