Kevin Hassett, the chairman of the White House Council of Economic Advisers, assured reporters on Wednesday that Federal Reserve Chairman Jerome Powell will remain in his job.
“Yes, of course, 100 percent, yes,” answered Hassett when asked by reporters if Powell will remain in his job.
Speculation about the possibility of Trump firing Powell has grown over the past several months, though it’s unclear if Trump legally has the power to do so. Stocks dropped severely in short sessions on Christmas Eve due in large part to reports that Trump may try to remove Powell, his appointee to the position, as Fed chairman.
White House Press Secretary Sarah Sanders told the Washington Examiner on Saturday that she was “aware of no plans” to attempt to remove Powell from his role.
Hassett said the partial government shutdown will have little lasting effect on the economy and federal workers, though he noted workers currently furloughed or still working in departments without funding, like the Department of Homeland Security, could go weeks without pay. The top White House economist also said he expected furloughed workers to receive full back pay once Trump and Congress reach an agreement on government funding, which stalled over Trump’s demand for $5 billion toward a border wall.
“In the end it’s just a short-term problem, not a long-term problem, for government workers,” Hassett said.
Though Trump has yet to publicly affirm Powell’s job security himself, two of his top economic advisers — Hassett today and Treasury Secretary Steven Mnuchin on Saturday — have defended the Federal Reserve’s independence and stressed that Powell remains safe. Mnuchin took the unusual step of tweeting a statement he said was from the president regarding Powell. The quote was critical of Fed policy but the president said he neither discussed firing Powell, as has been reported by multiple outlets, nor believes he can do so.
“My job is to defend the independence of the Fed,” Hassett said.
Hassett said he expects economic momentum to continue into next year, with the caveat that stock markets could continue to see uncertainty over the global economic outlook drive stock prices down.
“I think the momentum from this year is carrying forward to next year,” Hassett said.
At time of publication stock markets, which drifted into negative territory before Hassett’s mid-morning remarks, rebounded sharply into positive territory.
