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The US central bank's boss has hit back at speculation that his post might be in jeopardy as Donald Trump prepares to assume power in Washington. Federal Reserve chairman Jerome Powell said he would not step down if Trump asked and that it is "not permitted under law" for the White House to force him out.
Mr Powell was responding to questions from reporters at a press conference after the bank announced a cut to borrowing costs, lowering the Fed's key lending rate to the range of 4.5%-4.75%.
Forecasters have been expecting borrowing costs to fall further in the months ahead but warned that Trump's plans for tax cuts, immigration and tariffs could keep pressure on inflation and drive up government borrowing, complicating those bets.
Trump has pledged to impose import duties of at least 10% on all goods coming into the country, costs that economists say would be passed onto consumers, helping to drive up prices.
Tax cuts could also stoke inflation by encouraging spending, while the mass deportations of immigrants proposed by Trump would create a big hole in the US workforce that could drive up wages.
Interest rates on US debt have already jumped this week, reflecting those concerns.
Mr Powell said on Thursday that it was too early to tell how the new administration's agenda might affect the US economy - or how the Fed should respond.
Mr Powell was named chairman of the Fed by Trump in 2017, but later became a frequent target of his criticism.
During his first term, Trump called bank officials "boneheads" on social media and reportedly consulted advisers about whether he could fire Mr Powell.
Trump has said repeatedly he believes he has the right to voice his views on Fed actions. He told Bloomberg over the summer that he would let Powell serve out his term, which ends in 2026, "especially if I thought he was doing the right thing".
However, Powell said on Thursday that he would not step down if ordered to by Trump, and that an attempt to oust him before his term is over is "not permitted under the law".
