The Fed is facing a complicated moment, weighing sometimes conflicting data that could leave officials faced with both rising unemployment and rising inflation, the worst of both worlds for a central bank tasked with maintaining both stable prices and maximum employment.
Uncertainty over trade and other administration policies has left businesses also unsure of what to do, and the Fed’s decision-making has been under virtually daily assault from a president eager to install his chair when Powell leaves the Fed’s top job next May.
At the Sintra gathering, an annual forum sponsored by the European Central Bank and akin to the Fed’s yearly gathering at Jackson Hole, Wyoming, Powell got at least a momentary reprieve.
FED IS FOCUSED “100%” ON INFLATION AND JOBS TARGET
Asked about Trump’s barrage of insults, Powell’s comment that the Fed was focused “100%” on its inflation and jobs target drew applause from the audience and from the heads of the ECB, the Bank of England and other central banks who joined him onstage for a panel discussion.
Central bank independence from the lobbying of elected officials, at least in the setting of interest rates, is considered key to keeping inflation under control.
Powell said his message to whomever Trump chooses to succeed him in a little over 10 months would be “we’re trying to deliver macro stability, financial stability, economic stability for the benefit of all the people. If we’re going to do that successfully, we need to do it in a completely non-political way, which means we don’t take sides. We don’t play one side against the other.”
