Federal Reserve's Michael Barr tells lawmakers he plans to serve his full term as vice chair

Michael Barr, the Federal Reserve’s vice chair for supervision, said Nov. 20 he intends to stay at the Fed and serve his full term into the next administration, responding to Democrats’ concerns about the central bank under a second Trump administration.

At a House Financial Services Committee hearing with several banking regulators testifying, the committee’s ranking member Rep. Maxine Waters, D-Calif., asked Barr if he would “pack up and go if Trump or Elon Musk called to fire” him. The CEO of Tesla and SpaceX has become a close ally to now President-elect Donald Trump; Trump recently announced he wants Musk and Vivek Ramaswamy to lead a new “Department of Government Efficiency,” which would aim to cut excess regulations and costs in the federal government, as well as restructure federal agencies, according to Bloomberg.

“As (Fed) Chair (Jerome) Powell said, we serve fixed terms of office, and I intend to serve my fixed term of office,” Barr told Waters. The vice chair for supervision first took office in July 2022 to serve a four-year term.

At a press conference on Nov. 7, after the Federal Open Market Committee lowered the federal funds rate to a range of 4.5% to 4.75%, Powell said he would not resign if Trump requested it and that he’s not legally required to leave if asked. When a reporter asked whether Trump could demote Powell or any of the other Fed governors with leadership positions, the Fed chair responded, “Not permitted under the law.”

During his first term as president, Trump was a frequent critic of Powell and the Fed’s decision-making, and he said in October that he thinks he should “have the right to put in comments as to whether or not interest rates should go up or down.” However, economists said that same month that it’s best if the president refrain from publicly commenting on monetary policy.

Another Democrat, Rep. Al Green of Texas, asked Barr later in the hearing if he would “take a stand against Mr. Musk, the ‘co-president,’ and the president-elect when they demand that their policies be implemented.”

“I'm 100% committed to the independence the Federal Reserve,” Barr responded. “In meeting our mandate to serve the American public, I am 100% committed to that independence, together with the accountability and transparency before this body and the Senate.”

Waters also asked Barr about the potential inflationary impact of Trump’s proposed tariffs, as the former president has publicly proposed a universal baseline tariff of 10% to 20% on all U.S. imports, as well as a 60% tariff on U.S. imports from China. Some experts have expressed concern that such tariffs could increase inflation.

“It's very hard to say what any particular policy input will be without knowing more about it,” Barr said. “It's early for us in that kind of assessment. As we learn more about what the policies of the new administration might be, those will begin to be introduced into scenarios and forecasts and other measures of the economy.”

Barr’s comments again mirrored Powell's, who said Nov. 7 that “in the near term, the election will have no effects on our policy decisions,” as he doesn’t know the timing, substance or economic impacts of potential changes under the new administration.