Federal Reserve Chairman Jerome Powell said political attacks by President Donald Trump played no role in the Fed’s decision in January to signal that it planned to take a pause in hiking interest rates. He also said in an interview broadcast Sunday, March 10, that he can’t be fired by the president and that he intends to serve out his full four-year term.
In an interview with the CBS news program “60 Minutes,” Powell said that the Fed decided to pause its rate hikes in January, after increasing rates four times in 2018, because the global economy was slowing and other risks to the U.S. economy were rising.
Powell said that the Fed will always “make decisions based on what we think is right for the American people.”
Asked if the president could fire him, Powell said, “The law is clear that I have a four-year term. And I fully intend to serve it.”
Powell’s appearance on “60 Minutes” continued a tradition begun by then-Fed Chairman Ben Bernanke, who appeared on the program in March 2009, breaking a long tradition of Fed leaders not giving television interviews. Bernanke’s appearance came during the depths of the Great Recession when the country was losing millions of jobs and struggled to get out of the deepest downturn since the 1930s.
Bernanke and Powell’s immediate predecessor, Janet Yellen, both appeared with Powell during the Sunday broadcast. Powell was picked for the top Fed job by President Trump after he decided not to offer a second term to Powell. Both Bernanke and Yellen were asked what advice they had given Powell on withstanding outside criticism.
Bernanke said he kept a quotation from Abraham Lincoln on his desk saying that if your decisions turn out to be correct, the criticism will not matter. Yellen said that she and Powell had worked together closely on the Fed and that Powell was doing a good job of being “inclusive” in his decision-making.
The president has been highly critical of the Fed’s rate hikes, calling the increases his biggest threat. Trump’s attacks were frequent last fall when the stock market was plunging in value, a drop that the president blamed in part on the Fed’s rate hikes.
He has not been as vocal about the Fed since it announced it would be “patient” about future rate hikes, but in a March 2 speech he referred to Powell, without using his name, as a “gentleman” who likes raising rates and who likes tightening credit.
In his 2009 appearance, Bernanke talked about “green shoots” and said he felt the recession would “probably” be over by the end of 2009 if the efforts by the Fed and other government agencies were successful in stabilizing the banking system following the 2008 financial crisis.
The country did emerge from the recession in mid-June of 2009 and is currently in the 10th year of an expansion that will become the longest in U.S. history if it lasts past this June.
In the Sunday broadcast, Powell said while he felt U.S. growth would slow this year, he did not feel the country was headed for a recession.
“The outlook for our economy, in my view, is a favorable one,” Powell said. “This year, I expect growth will continue to be positive and continue to be at a healthy rate.”
The Fed in January signaled that due to a slowing global economy and other economic risks, it had decided to be “patient” in deciding when to raise interest rates again. Powell also delivered that message last month in testimony before Congress.
While the Fed in December had signaled it expected to raise rates two more times in 2019, many economists believe the central bank will now keep rates unchanged for a prolonged period and may not hike rates at all this year.
The economy grew at a solid 2.9 percent rate in 2018, helped by Trump’s tax cuts and billions of dollars of increased government spending. But economists believe that support will wane this year and with the global economy slowing, the U.S. economy is likely to slow to growth of just above 2 percent.