On Wednesday, Federal Reserve Chairman announced that he would keep interest rates the same, despite overtures from President Donald Trump.
Trump has repeatedly called for Powell to lower interest rates as he seeks to tilt the global economy in the United States’ favor by levvying across-the-board tariffs against adversaries like China and allies like Canada, Mexico and Europe.
Powell, whom Trump nominated to lead the country’s central bank, remained firm that the Federal Reserve would remain apolitical.
“It doesn't affect our doing our job at all,” Powell said in response to a question about Trump’s calls to cut rates. “We're always going to consider only the economic data, the outlook, the balance of risks, and that's it. That's all we're going to consider.”
In his remarks and press conference afterward, Powell made it clear that the tariffs could risk higher inflation and unemployment. That would pit the Federal Reserve’s two mandates — keeping inflation and unemployment low — in direct conflict with each other.
“And if that's what we do see, if the tariffs are ultimately put in place at those levels, which we don't know, then ... we won't see further progress toward our goals, but we might see a delay in that,” Powell said.
At the same time, Powell, a Republican who worked in George H.W. Bush’s administration and had a distinguished career in finance, shied away from partisanship, given the fact the Federal Reserve is supposed to remain apolitical.
Powell’s term as chairman ends a year from now, but his position on the Federal Reserve Board of Governors expires in 2028. But he demurred when asked if he would stay on board.
“I don't have anything for you on that,” Powell said. “We want to make the best decisions for the people that we serve. That's what we think about day and night.”
In recent weeks, Trump hinted that he wanted to fire Powell – and then, when markets reacted negatively, insisted he had “no intention” of doing so.
Again, Powell dodged political territory. “I don't have anything more for you on that,” he said. “I've pretty much covered that issue.”
He also dodged when asked about the fact he has yet to meet with Trump since the president’s return to office.
“I've never asked for a meeting with any president, and I never will,” Powell said. “I think it's always come the other way. A president wants to meet with you, but that hasn't happened.”
While the Federal Reserve is dedicated to to keeping prices and unemployment low, Powell himself seems to have an additional dual mandate personally: to navigate the joint challenges of the dangers Trump’s tariffs pose to the US economy while also avoiding discussing politics.
Ostensibly, the US government has numerous branches that are supposed to remain devoid of political influence. But Trump has targeted many of them, firing two Democratic commissioners on the Federal Trade Commission; significantly weakening the Consumer Financial Protection Bureau, which is funded by the Federal Reserve; and flouting rulings from the courts in regards to controversially sending immigrant Kilmar Abrego Garcia to an El Salvador prison on suspicion of being a gang member but without having been charged with a crime.
Powell, and the Federal Reserve as a whole, is different. Trump often expressed dissatisfaction with Powell during his first term, but Powell earned high praise for his management during the COVID-19 pandemic. Powell’s management led to Trump’s Democratic successor Joe Biden renominating him for another five-year term.
As a result, Powell is not necessarily “standing up” to Trump as much as he is doing what central bankers always do: canceling out the politics and focusing on the data.
But doing so is much harder in the Trump era when the president sees almost every institution as something he wants to personally control.
Ironically, this week, Trump faced steadfast opposition from Canadian Prime Minister Mark Carney on Tuesday when the newly-elected Carney visited the Oval Office. Despite Trump’s insistence on adding Canada to the United States, Carney told Trump “as you know from real estate, there are some places that are never for sale.”
Incidentally, Carney and Powell know each other from when Carney ran the Bank of England.
Perhaps the key to ignoring Trump’s bullying may come not from bluster on one’s own behalf, but from having the traits of an academic and unassuming central banker and financier.
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