January 4, 2019 / 3:36 PM / a year ago

Fed Chair Powell says he would not resign if Trump asked

ATLANTA (Reuters) - Federal Reserve Chairman Jerome Powell on Friday said he would not resign even if President Donald Trump asked him to do so, a clear assertion of the U.S. central bank’s independence in the face of Trump’s strident criticism of the Fed’s rate hikes.

U.S. Federal Reserve Chairman Jerome Powell, former Fed chairs Janet Yellen and Ben Bernanke (R) speak during a panel discussion at the American Economic Association/Allied Social Science Association (ASSA) 2019 meeting in Atlanta, Georgia, U.S., January 4, 2019. REUTERS/Christopher Aluka Berry

After the Fed’s decision in mid-December to raise rates for a fourth time in 2018, reports surfaced that Trump had discussed with his advisors the feasibility of firing Powell, and was seeking a meeting with the Fed chair.

Financial markets, shaken by the specter of further Fed rate hikes against a background of weakening global growth but not keen on the idea of a White House trying to directly intervene in rate-setting decisions, reacted badly.

Advisors quickly tried to calm markets, with White House economic adviser Kevin Hassett telling reporters Powell’s job is “100 percent” safe. But investors have stayed on edge, not only because of the tension between the White House and the Fed, but also because of signs of weakness in global growth and fear that Trump’s trade war with China could hurt U.S. growth.

Central banks typically view independence as a critical tool, allowing them to deliver politically unpalatable rate hikes when necessary for broad economic health.

Speaking on a panel at the American Economic Association’s annual meeting on Friday, Powell spent much of his time soothing markets in his own way, saying he would be “patient” and flexible on rate hikes and sensitive to the downside risks that markets are pricing in.

Asked about Trump’s criticisms, delivered in tweets and in media interviews, Powell said he had received no direct communications from the White House about any change in his job, or about Trump’s unhappiness with the Fed’s rate hike path.

Nor, he said, was there any scheduled meeting between himself and Trump, though he sought to downplay the importance of any such meeting should it ultimately take place.

“I can’t think of any Fed chairmen who didn’t eventually meet with the president,” said Powell, whom Trump picked to head the Fed starting last February.

“If the president asked you to resign, would you do it?” panel moderator Neil Irwin of the New York Times asked.

“No,” Powell said simply.

Reporting by Howard Schneider; Writing by Ann Saphir; Editing by Chizu Nomiyama and Andrea Ricci

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below