Key Points

• Federal Reserve Chair Jerome Powell said Wednesday that he is not worried that President-elect Donald Trump will try to politicize the central bank once he takes office in January.

• There are safeguards in the congressional legislation that created the central bank that will help preserve it from political influence, he said during an appearance in New York.

• Powell gave no clues about which direction he is leaning in the near term for interest rates, although he did note that the Federal Reserve can afford to be cautious given the strength of the U.S. economy.

NEW YORK – Federal Reserve Chairman Jerome Powell said Wednesday that he is not concerned that President-elect Donald Trump will try to politicize the central bank once he takes office in January.

The question of the Federal Reserve’s independence has arisen in recent months, amid reports that Trump could try to pull the strings of monetary policy through legislation and possibly installing a “shadow chair” that could undermine the authority of the Federal Reserve. Powell.

However, Powell said there are safeguards in the congressional legislation that created the Federal Reserve that will help preserve it from political influences.

“What does independent mean? It means we can make our decisions without them being reversed,” he told CNBC’s Andrew Ross Sorkin during an onstage interview at the New York Times DealBook Summit.

“That gives us the ability to make these decisions for the benefit of all Americans at all times, not any particular political party or political outcome,” he added. “We are supposed to achieve maximum employment and price stability for the benefit of all Americans and keep them completely out of politics.”

Powell gave no clues about which direction he is leaning in the near term for interest rates, although he did signal that the Federal Reserve can afford to be cautious. As he has said before, Powell said the U.S. economy is “the envy of other major economies around the world,” allowing the Fed to be patient as it contemplates future rate moves.

The Federal Reserve’s next interest rate decision will come in two weeks. Markets place a probability of around 75% that the Federal Open Market Committee will reduce its key interest rate by a quarter of a percentage point. The expectation is that the Federal Reserve will skip the January meeting before making some more cuts in 2025.

During his first term, Trump criticized the Federal Reserve and Powell, whom he nominated. In the months leading up to this year’s election, Trump advocated allowing the president to have a say when the central bank is making interest rate decisions.

Although many presidents have tried to influence the Federal Reserve, Trump was the most public about it. Still, Powell said he believes there is strong support in Congress for keeping the Federal Reserve’s decision-making out of the political maelstrom in Washington.

“I think there is very, very broad support for that set of ideas in Congress in both political parties on both sides of Congress, and that’s what really matters,” he said. “It is the law of the land and I am not concerned that there is any risk of us losing our legal independence.”

Trump’s transition team did not immediately respond to a request for comment.