President Trump and Federal Reserve Chair Jerome Powell huddled at the White House Monday, and the Fed announced that Powell had told the commander-in-chief that politics would play no role in its decisions on monetary policy.
“At the President’s invitation, Chair Powell met with the President and the Treasury Secretary Monday morning at the White House to discuss the economy, growth, employment and inflation,” the Fed said in a statement.
“Chair Powell’s comments were consistent with his remarks at his congressional hearings last week. He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy,” the statement continued.
Trump, who has tweeted out a torrent of criticism at the central bank, said his meeting with Powell went smoothly.
“Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.,” Trump tweeted.
Trump had earlier called the bankers “boneheads” for not cutting interest rates and labeled Powell personally as an enemy of the US on a par with China leader Xi Jinping.
The Fed in its statement was careful to note what wasn’t discussed: Powell’s expectations for future monetary policy.
Trump has for more than a year charged the Fed with undermining his economic policies by, in his view, keeping interest rates too high, and depriving the US of what Trump believes are the benefits of the negative rates of interest set by the European and Japanese central banks.
The Fed has cut rates three times this year — in part to offset what it views as damage done by the Trump administration’s trade war with China.
But after its last meeting, policymakers signaled they would lower rates no further unless the economy takes a serious turn for the worse.
The meeting included Treasury Secretary Steven Mnuchin.
Powell met with Trump in February and has also had at least three brief phone conversations with him.
He has also made deliberate efforts to court members of the House and Senate, an important source of support at a time when Trump has expressed regret for ever appointing Powell and reportedly explored whether he could give him the boot.
Fed chairs are appointed to four-year terms by the president, but once confirmed by the Senate, are intended to be insulated from White House political pressure over how to manage monetary policy.
They can only be removed “for cause,” not over a disagreement over policy.
Meetings between Fed chairs and presidents are not unprecedented but they are infrequent, as opposed to the nearly weekly sessions that central bankers have with the head of the Treasury.
With Reuters