Jul 31, 2019

Monetary Policy I Powell says Fed will never move rates because of political factors or to prove its independence

Yun Li

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, June 19, 2019.
Andrew Harrer | Bloomberg | Getty Images
Federal Reserve Chairman Jerome Powell said the central bank's rate decision was not a result of political pressure.
"We never take into account political considerations. There's no place in our discussions for that. We also don't conduct monetary policy in order to prove our independence," Powell spoke at a press conference on Wednesday.
The Fed dropped the target range for its overnight lending rate to 2% to 2.25%, or 25 basis points from the previous level, marking the first rate cut since December 2008.
President Donald Trump has been putting increasing pressure on the central bank, even calling for it to deliver a 50 basis point cut just a day ahead of the Fed announcement.
"I'd like to see a large cut, and I'd like to see quantitative tightening immediately stopped," Trump said on Tuesday. "They moved in my opinion far too early and far too severely, and puts me at somewhat of a disadvantage," he added.
However, Powell said the rate cut was essentially "a mid-cycle adjustment to policy," which differs from a "lengthy cutting cycle." The chairman added there was "definitely an insurance aspect" to the cut.

Source: CNBC

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