White House assures Fed chairman job is safe despite Trump’s Christmas Eve criticism

A White House official has assured that the head of the US Federal Reserve is not at any risk of losing his job, amid jitters on Wall Street throughout December caused in part by Trump’s criticism of the Fed.

Asked on Boxing Day if Fed chairman Jerome Powell’s job was safe, economic advisor Kevin Hassett said to reporters: “Yes, of course, 100 per cent.”

The assurance comes in the face of repeated attacks on the central bank by the President, who most recently called the Fed the US economy’s “only problem” on Monday.

Investors have also closely followed rumours Trump had privately discussed whether he could fire Powell, after appointing him last February.

Powell has continued gradually hiking interest rates in the same vein as predecessor Janet Yellen, a strategy which has repeatedly drawn the President’s ire, either verbally or on Twitter.

https://twitter.com/realDonaldTrump/status/1077231267559755776

It is unclear whether Trump actually has the power to dismiss Powell, but his savagery of the central bank earlier this week saw stock markets plunge.

US stocks nudged up on Wednesday, with the S&P 500 up 0.2 per cent. The index was on track for its biggest percentage decline this month since the Great Depression.

Earlier this month the Fed followed through on expectations it would hike interest rates by 0.25 to a range of 2.25 per cent 2.5 per cent – the highest level in a decade.

But, it added, there would be fewer rate hikes in 2019, with the US economy having been growing strongly and the job market improving.

“Some” further rate hikes would be required, it said in a statement, reducing the expected number of raises next year from three to two.

In a subsequent press conference, responding to questions about Trump’s criticism, Powell said: “Political considerations play no role in our decisions about monetary policy. We are absolutely committed to that mission and nothing will deter us from doing what we think is the right thing to do.

“I am not worried [about Trump] because I know we are always going to do our jobs as we have always done them.”