WASHINGTON: US Federal Reserve (Fed) chair Jerome Powell used a gathering of finance chiefs from around the world to stress that central banks must be shielded from politics to ensure they can focus on keeping inflation stable and employment high, according to people who listened to his remarks.
Powell delivered an impassioned defence of central bank independence when he addressed policymakers and finance ministers during a meeting last Friday at the International Monetary Fund (IMF), said the sources.
His remarks triggered rounds of applause from the audience and were followed by equally impassioned remarks from his peers. A Fed spokesperson declined to comment.
The remarks followed President Donald Trump’s renewed public ire for Powell in recent days.
Earlier this week, Trump called Powell a “major loser” on social media and again pushed for the Fed to lower interest rates.
Those comments – along with Trump’s public musings about Powell’s termination – sparked jitters on Wall Street, as investors fretted the central bank’s independence could come under threat.
The president subsequently said he had no intention of firing the Fed chief.
The Fed on Saturday will begin its customary quiet period ahead of policymakers’ next meeting May 6 to 7.
Officials are expected to hold rates steady at that gathering for the third consecutive time.
Powell and other officials have expressed a willingness to keep policy on hold for now, in part to guard against the possibility that Trump’s tariff policy could lead to persistent inflation.
Powell has consistently emphasised the importance of central bank independence, and has said Fed officials don’t take politics into account when setting policy.
In comments last week, Powell said he and his colleagues are not removable except “for cause”.
The Fed’s independence “is very widely understood and supported in Washington, in Congress, where it really matters,” Powell said on April 16 at the Economic Club of Chicago.
“We’re never going to be influenced by any political pressure,” he added at that event.
“People can say whatever they want. That’s fine.
“That’s not a problem. But we will do what we do strictly without consideration of political or any other extraneous factors.” — Bloomberg
