New York Fed president publicly backs Powell: “A person beyond reproach”

New York Fed President John Williams publicly backs Powell

Stresses Fed independence, saying it “helped deliver major gains in curbing inflation”

John Williams, president of the Federal Reserve Bank of New York, publicly defended Federal Reserve Chair Jerome Powell after Powell faced threats of criminal prosecution on allegations of perjury before Congress related to renovations at the U.S. central bank’s headquarters.

Williams praised Powell at a discussion hosted by the Council on Foreign Relations (CFR) in New York City on the 12th (local time), saying Powell “has calmly led the Fed even during a period of heightened uncertainty,” according to the Wall Street Journal (WSJ) and other foreign media reports.

He also said Powell “has proven himself to be a person of impeccable integrity.” Williams stressed that if the Fed’s independence is threatened, it could lead to the risk of “unfortunate consequences,” including economic instability and higher inflation.

Speaking with reporters after his remarks, he underscored that Fed independence from political interference “helped deliver major gains in curbing inflation.” Williams, who also serves as vice chair of the Federal Open Market Committee (FOMC), is known to work closely with Powell on interest-rate decisions.

Williams also said the policy rate has reached a comfortable level, suggesting the Fed may not rush into further cuts after lowering rates three meetings in a row through December last year.

He again said that “monetary policy is now well positioned,” an expression he used when referring to the eight-month period last year during which the policy rate was held steady, the WSJ reported. Williams said he expects the unemployment rate to stabilize this year and then decline gradually over the next few years, adding that current labor-market indicators are at pre-pandemic levels.

Park Subin, Hankyung.com reporter waterbean@hankyung.com