Under pressure from President Donald Trump to lower interest rates, Federal Reserve Chairman Jerome Powell met with the president at the White House, where Trump continued to press his case and Powell said he won’t take politics into account in setting monetary policy, according to a Fed statement and the White House press secretary.
Trump asked Powell to meet with him, according to the statement. Powell has previously said he has never requested a meeting with a president. The two met on May 29 “to discuss economic developments including for growth, employment, and inflation,” the Fed statement said.
“Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the statement continues, adding that Powell said the Fed “Will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis.”
White House Press Secretary Karoline Leavitt said May 29 that the Fed statement is “correct” but added that Trump “did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries.”
The Fed left its key rate unchanged at the end of its May meeting and gave no hint it plans to lower it soon, citing “uncertainty.” The central bank lowered the rate by a percentage point late last year as a pandemic-related price surge eased, but has paused cuts for three consecutive meetings.
The Fed next meets June 17 through June 18.
Trump repeatedly has attacked the Fed leader, but backed off suggestions that he could have Powell removed. Trump’s attacks on Powell date back to shortly after Trump appointed Powell in 2018.
“I’m not happy with him… if I want him out, he’ll be out of there real fast, believe me,” Trump told reporters during a White House event April 17.
White House economic adviser Kevin Hassett said April 18 that the president and his team were studying whether they could fire Powell. But Trump later said he has “no intention of firing” the Fed chair.
Powell warned in April about the impact of Trump’s tariffs on inflation, telling the Economic Club of Chicago that “Unemployment is likely to go up as the economy slows, in all likelihood, and inflation is likely to go up as tariffs find their way and some part of those tariffs come to be paid by the public.”
In general, the Fed cuts interest rates to stimulate a flagging economy and job market. It increases interest rates – or keeps them higher for longer – to lower inflation or prevent a spike in prices.
Trump lashed out on April 17 with a social media post, saying Powell “should have lowered Interest Rates… long ago, but he should certainly lower them now.”
Contributing: Bart Jansen, Paul Davidson
This article originally appeared on USA TODAY: Trump meets with Fed Chair Powell after weeks of criticism
