Monday evening’s meeting between the chairman of the Federal Reserve Board and the president of the United States publicly (at least) resulted in a common theme: The leader of the central bank’s board citing independence in policy setting.
It was at least the third time recently the Fed’s chairman made a similar comment.
In a release Monday, the Federal Reserve said its board will not consider politics in its setting of monetary policy via the Federal Open Market Committee (FOMC), Federal Reserve Board Chairman Jerome (“Jay”) Powell said during a dinner Monday with President Donald J. Trump.
It was the first reported meeting of the president and the Fed chairman since Powell was sworn in to his post, one year ago almost to the day.
The Fed issued the following statement Monday:
“At the President’s invitation, Chair Powell and Vice Chair Clarida joined the President and the Treasury Secretary for an informal dinner tonight in the White House residence, to discuss recent economic developments and the outlook for growth, employment and inflation.
“Chair Powell’s comments in this setting were consistent with his remarks at his press conference of last week. He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.
“Finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy in order to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.”
Trump has been critical of the Fed’s actions, and urging it to change course, particularly when the central bank’s rate-setting committee was raising rates.
Last week, Powell reiterated the Fed’s independence in a press conference following an FOMC meeting. In response to a reporter’s question, said central bank is “always going to do what we think is the right thing” and will never “take political considerations into account or discuss them as part of our work.”
He acknowledged that those who work at the Fed are human and make mistakes. “But we’re we’re not going to make mistakes of character or integrity,” Powell said.
Early in the year (on Jan. 4), Powell said in an on-stage interview that he had “no news” about scheduling a face-to-face meeting at the White House with the president – although he noted that “meetings between president and Fed chairs do happen … I can’t think of any Fed chairs who didn’t meet with the president. But, again, nothing has been scheduled.”
But he also said, in the same interview, “no” to the question “would you resign if President Trump asked you to?”
And in December, Powell said (also at a press conference following an FOMC meeting) that “political considerations play no role in our discussions” about setting interest rates.