The outgoing boss of the US Federal Reserve BankJerome Powell, has clearly criticized the Trump administration’s legal actions against the Federal Reserve. “These legal actions by the government are unprecedented in our 113-year history,” said Powell at what is expected to be his last press conference as Fed chairman. They jeopardized the “ability to conduct monetary policy without taking political factors into account.”
Powell expressed concern that the attacks could weaken the institution. It is important that US citizens can rely on a central bank that is free of political influence. It is “an absolute foundation” of the US economy.
At the same time, Powell announced that he would remain on the Fed board as a simple governor after his term ends in mid-May. Recent events left him “no choice” but to keep his seat on the board. He left it open how long he wanted to stay: he would not leave the board until the investigation against him had been “really and finally concluded under transparent conditions.” At the same time, he announced that he wanted to “behave cautiously” in his role. His designated successor Kevin Warsh he wished him all the best.
Fed leaves key interest rate unchanged for the third time in a row
The background is investigations against Powell because of allegedly excessive renovation costs at the Fed headquarters in Washington. District Attorney Jeanine Pirro had announced last weekto stop the proceedings. Powell confirmed that the Justice Department would also refrain from reopening the investigation and issuing new subpoenas. He himself had previously described the investigations as a pretext to put pressure on him regarding interest rate policy. Trump had Powell publicly attacked for months and blamed for, in his view, too hesitant interest rate cuts.
Before his speech, the Fed had the key interest rate remained in the range of 3.50 to 3.75 percent for the third time in a row. Powell’s designated successor, Kevin Warsh, cleared the first hurdle in the Senate confirmation process on the same day. The approval of the Republican-dominated plenum is considered a formality.