'Resolute' Powell "No Impact At All"... Emphasizing Independence Against Trump [Fed Watch]

'Resolute' Powell Emphasizes Central Bank Independence Against Trump

"What impact does President Trump's demand for a rate cut have on the decisions and operations of the U.S. Central Bank (Fed)?" (Edward Lawrence, Fox Business Reporter)

"It has no impact at all. We will always do the same thing." (Jerome Powell, Fed Chair)

On the 7th (local time), at the press conference room on the first floor of the Fed building at 2001 C Street Northwest, Washington DC. Amidst President Trump's pressure for a cut, Powell, who announced the decision to hold rates steady, made it clear that he intends to maintain the Fed's independence.

During the conference, Powell did not offer any lip service suggesting that tariffs could be positive for the U.S. economy in the long term. Instead, he clearly pointed out that while the effects of tariffs have not yet been confirmed in the data, "there will be two effects: economic weakening and rising inflation." In his opening remarks, he also warned against premature expectations of a rate cut, stating, "Without price stability, we cannot achieve long-term strong labor market conditions that benefit all Americans."

'Resolute' Powell "No Impact At All"... Emphasizing Independence Against Trump [Fed Watch]

Powell used almost identical expressions when he spoke at the Chicago Economic Club on the 16th of last month. At that time, the market was in turmoil due to the announcement of reciprocal tariffs on the 2nd of last month, followed by a grace period and strengthened tariffs on China. The Fed Chair, who assessed that tariffs would be negative for the U.S. economy, greatly angered the President. President Trump immediately began mentioning his dismissal on social media the next morning, and at a press conference, he threatened, "He'll be out if I tell him to leave."

Despite this, Powell's repetition of nearly the same words and expressions at the press conference was a 'statement of conviction' that he had no intention of bending his will. When Jennifer Schuessler, a Yahoo Finance reporter, pointed out that Powell had never met with President Trump since his inauguration and asked, "Why haven't you requested a meeting with the President yet?" Powell replied, "I have never asked to meet with any President first, and I will not do so in the future." He meant that he would meet if the President asked first, but he would not make such a decision himself.

In response to Powell's statement of conviction, a CNN reporter asked a more sensitive question. He asked if Powell would serve the remainder of his term as a Fed governor (until January 31, 2028) after stepping down from the chairmanship (until May 15 next year). Powell quickly cut off, saying, "I have nothing to say about that issue."

His answer was clear. Powell said, "My colleagues and I are all focused on navigating difficult situations and making the right decisions," adding, "We are trying to make the best decisions for the people we serve, and that's all we think about day and night."

Washington = Special Correspondent Lee Sang-eun selee@hankyung.com