WASHINGTON (AP) – Chairman Jerome Powell said Wednesday that the Federal Reserve’s ability to set interest rate Freedom from political interference is necessary to make decisions that serve “all Americans,” rather than political parties or political outcomes.
At the New York Times’ Dealbook Summit, Powell answered questions about President-elect Donald Trump’s policies. Criticism from many people The Fed and Powell himself. During his campaign, Trump argued that as president he should have a “say” over the Fed’s interest rate policy.
“We must achieve maximum employment and price stability for the benefit of all Americans and stay out of politics completely,” Powell said in remarks Wednesday.
Despite President Trump’s comments, the Fed chairman said he was confident there would be broad support in Congress to maintain the central bank’s independence.
“I’m not concerned about risking losing our legal independence,” he said. “There is very broad support for this line of thinking in Congress, in both political parties, on both sides of the Hill.”
On the topic of interest rates, Chairman Powell said the economy is doing better than the Fed thought in September, when it expected to cut rates three times in 2024 and then four times in 2025. , said the Fed could afford to prudently lower its benchmark interest rate.
“We’re not there yet in terms of inflation, but we’re making progress,” Powell said. “We can afford to be a little more cautious.”
The Fed is aiming for a “soft landing” for the economy, allowing the central bank to raise interest rates to bring inflation down to its 2% target without triggering a recession. History shows that it is a rare and difficult feat.
But the economy appears largely on track for such an outcome. The job market has slowed. Inflation has also fallen significantly in recent months, although it has remained slightly above the Fed’s target, which could make policymakers reluctant to cut rates further.
Several other Fed officials said this week that they expected to continue lowering rates, without committing to lower rates at their next meeting later this month.
On Monday, Christopher Waller, a ranking member of the Fed’s board of directors, said: he said “leaning” Ahead of interest rate cuts at the central bank meeting in two weeks. Waller, however, added that if upcoming inflation and employment data appear to be worse than the Fed expects, he may support keeping interest rates on hold.
On Tuesday, San Francisco Fed President Mary Daly said she supported further rate cuts, without commenting specifically on the timeline.
“Whether it’s in December or later, that’s an issue that we’ll have an opportunity to discuss and discuss at our next meeting,” Daley said in an interview on Fox Business News. “But the important thing is that we want sustained economic expansion with low inflation, so we have to keep cutting policy to adapt to the economy.”
