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Fed Chair Jerome Powell says he wouldn't resign if President Trump asked

Fed raises key interest rate

Federal Reserve Chairman Jerome Powell on Friday said he would not resign if President Donald Trump asked him to do so. Speaking as part of a panel at the annual meeting of the American Economic Association in Atlanta, Powell replied "no" when asked directly if he would step down if requested to by Mr. Trump.

The Fed chairman said he hasn't communicated directly with the White House and that no meetings with the president had been scheduled, though he did not rule out one in future. "Meetings between the president and the Fed chairs do happen," he said. 

During an amicable discussion that had Powell and his immediate past predecessors at the Fed, Janet Yellen and Ben Bernanke, expressing similar views on the economy and on the need for the central bank to set its policy independently of political considerations. 

Yellen expressed concern that presidential attacks could serve to ultimately undermine the Fed. "It has been a very long tradition, begun with President Clinton, for presidents not to comment on particular Fed decisions," she said. "I would worry if it intensifies."

Bernanke, who was appointed to the Fed by President George W. Bush and then reappointed to the position by President Barack Obama, said he had a good working relationship with both men. "It's very important that the Fed be accountable and transparent," said Bernanke, who also stressed the need for the central bank to operate "independently and in a nonpartisan way."

Trump: Federal Reserve thinks "our economy's too good"

Mr. Trump has publicly expressed regrets about appointing Powell as Fed chairman and repeatedly attacked the central bank for raising interest rates. 

The Fed hiked interest rates four times in 2018 as it continued to tighten monetary policy. Central bankers expect two additional increases this year, according to projections from the Fed's December meeting.

Powell strikes "dovish" tone

Powell sought to reassure investors that the Fed is paying attention to the recent plunge in stocks. Already buoyed by blowout December hiring numbers released by the Labor Department on Friday, leading U.S. indexes rose further as Powell reiterated that the Fed doesn't have a set course on interest rates.

"With the muted inflation readings that we've seen, we will be patient as we watch to see how the economy evolves," Powell stated.

Powell's "more dovish leaning, coming on the heels of the superlative December employment report, has for now assuaged financial market investors," economist Kathy Bostjancic of Oxford Economics said in a client's note.

Powell attributed Wall Street's recent slide to the markets pricing in downside risk, while noting that the economy remains in good shape.

Investors are expressing concerns about signs of slowing global growth and U.S. trade tensions with China, said Powell, who added: "We're going to be taking those downside risks into account in policy going forward."