The Federal Reserve will continue to set monetary policy based on careful, objective and non-political analysis, the chair of the central bank told the president of the United States Monday, the Fed said.
In their first publicly acknowledged conversation since May, Federal Reserve Board Chair Jerome H. (“Jay”) Powell and President Donald Trump talked to each other on Monday in a face-to-face conversation, the central bank said. In a statement, the Fed said the meeting was held at the president’s invitation.
“Chair Powell’s comments were consistent with his remarks at his congressional hearings last week,” the Fed said in a statement. “He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy.”
The statement also noted that Powell and other members of the rate-setting Federal Open Market Committee (FOMC) will set monetary policy, “as required by law, to support maximum employment and stable prices.”
The White House has not yet issued an official statement about the meeting; the Fed said Treasury Secretary Steven Mnuchin also attended the meeting. However, Trump tweeted about the meeting within an hour of the Fed statement’s release. “Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve,” Trump wrote. “Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.”
According to reports, the two met in the president’s residence – not in the Oval Office in the West Wing of the White House.
From February through May, Trump and Powell met or talked (if briefly) once a month. Since Starting in June, however, the communication channel between the two stopped. The four-month period of communication began with a 90-minute dinner, also attended by Mnuchin and Fed Vice Chairman Richard Clarida. For the each of the next three months, the president and Fed chair held short (five-minute) telephone calls, according to Powell’s publicly released calendar.
The Fed statement issued Monday is nearly the same as that issued by the central bank in February following the Powell-Trump dinner. However, the phrase “as required by law” is prominently included in the Monday statement.
Trump has continued to be highly critical of the Fed’s actions on monetary policy and interest rates, complaining the Fed has either not acted fast enough to reduce rates – or didn’t cut rates deeply enough.
Powell has consistently (and frequently) pointed to the Fed’s independence from political pressure as the foundation for the central bank in making monetary policy decisions. In October, Powell told a group that Congress has granted the nation’s central bank “significant protections” from short-term political pressures – and the bank, in return, owes the public clear explanations about what, and why, it does what it does.
Two days before that, introducing a film about former Fed Board Chairman Marriner Eccles, Powell pointed to a quotation inscribed on a plaque at the Fed building named for Eccles in Washington, D.C.: “’The management of the central bank must be absolutely free from the dangers of control by politics and by private interests, singly or combined.’”