Fed chief Powell reasserts central bank's independence in talks with Trump

Jerome Powell

Federal Reserve Chairman Jerome Powell reasserted the independence of the US central bank during White House talks with President Donald Trump on Monday, the Fed said.

Powell attended the meeting, which comes amid an unprecedented campaign of public attacks on the central bank, at the invitation of the president, and was joined by Treasury Secretary Steven Mnuchin, the Fed said in a statement.

In a tweet, Trump, who has lambasted Powell in harsh, personal terms over monetary policy, said the meeting was "good & cordial," adding that "everything was discussed" including interest rates, inflation, foreign exchange and the Fed's balance sheet policies.

The Fed, however, said Powell's comments were consistent with last week's congressional testimony and did not concern "expectations for monetary policy," except to say it will depend entirely on new economic information.

"Finally, Chair Powell said that he and his colleagues on the Federal Open Market Committee will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis," the statement said.

Powell has long insisted policymakers disregard politics when setting policy.

But Trump has repeatedly hammered the central bank, calling policymakers "boneheads" and "clueless," and accusing them of mistakenly raising interest rates in 2018 and being too slow to lower them this year.

The Fed's policy-setting Federal Open Market Committee has cut interest rates three times this year, saying that Trump's trade war in particular poses a danger to the economy, which has slowed since the start of the year.

But, after the most recent cut, Powell said last month the central bank will hold its fire for now as officials wait to see how the economy progresses.

Trump and Powell had last met in February, over dinner at the White House.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel