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Jerome Powell, Chairman of the Federal Reserve, met with President Trump And firmly repeated Fed’s independence, emphasizing that monetary policy decisions are based solely on economic data, not political pressure. Despite the constant Trump’s calls to reduce interest rates and previous threats to Great Powell, the Fed said its powers are based on maximum employment and stable prices through non -political, data -based analysis.
When Jerome Powell was summoned to the White House, he conveyed a clear message: Trump has no power to the Federal Open Market Committee Committee.
In a statement announced yesterday, the Fed confirmed that Powell was invited to a meeting with Trump.
There was never a doubt about the topic of the couple’s discussion when they finally sat down.
The short was constantly lobbying the FMC at the base rate to keep it steadily before the election (so that the biden camp does not give any perceived advantage), or to go to the rates as soon as he won the Oval Office.
To put it mildly, Powell and Trump’s relationship in his second administration was rude when the president went threatened with fire Powell, and gave him a “late Powell” nickname.
But at a meeting that happened yesterday, Powell tried to set a record directly.
“Chairman Powell has not discussed his expectations of monetary policy, unless he emphasizes that the political path will depend entirely on the economic information he receives and what it means for the prospect,” the Fed said.
Whether a message or not is debated.
After the meeting, Trump also clearly said his thoughts, and the White House press secretary, Karoline Leavitt, told reporters yesterday that Powell “makes us economic disadvantage to China and other countries,” without reducing tariffs.
“The president voted greatly in public and now I can reveal it privately,” she added.
Although Leavitt said the president had made it clear that he believed Powell was doing a “mistake”, he did not raise the chairman’s term of term to 2026. May The end of the end – the step that, according to Powell, will not be lawful.
Non -political agency
Powell, who appointed FOMC in the first term in the first term, followed the stable line in the face of criticism from the Oval Office.
When Trump’s rhetoric is pressed over and over again to reduce FMC to reduce the rates to promote the economy, Powell required the committee’s decision -making process to be firmly based on the data and anecdotic evidence of each regional bank.
The will of the Wall Street or Oval Office does not go into the decisions about whether to cut, the hike or the basic rate, which is currently 4.25% to 4.5%.
Although President Trump accused Powell “political”, the chairman’s accusation was blurred.
“We are a non -political agency,” he told reporters last summer. “We don’t want to participate in politics in any way.”
And the line was repeated this week, when the Fed added in his statement: “Chairman Powell said he and his fellow FMC colleagues would determine monetary policy as required by law to support maximum employment and stable prices, and to make those decisions based on careful, targeted and non -political analysis.”
The argument of the independent central bank is clear, and the threat to the autonomy of its decision -making process in the past caused markets in the markets.
FMC is obliged to be independent of politics at the federal level, so the main economic leverage in its arson – the basic rate – is not used to seek what is sitting in the White House. Instead, it is used to ensure long -term economic health.
In the past, the president had not done too much – for example, President Nixon, for example, markets are a higher warning of any clues, that Trump can really threaten the Fed independence. This was shown most clearly at the end of last month, when the Dow Jones and S&P 500 were dense after the President threatened to push Powell out of his duties.
After 24 hours, Trump retreated, saying to the media, “I am not going to shoot [Powell]; I would like it to be a little more active due to its idea to reduce interest rates. This is a great time to reduce interest rates. If it doesn’t, it’s the end? No, no, it’s not, but it would be a good time. ”
The regional presidents of the federal reserves have also unpacked thinking FateWhen the Chicago Austan Goolsbee explains: “The Federal Reserve Act is set exactly so that the Fed Chair’s term is not in the electoral cycle. This is not a normal political departure.
“Every two years in the US there is a federal election: will the Fed do not do its job every other year because the election is underway?”
This story was initially displayed by fortuna.com