A prominent House Republican who is in charge of a monetary policy task force told Yahoo Finance he still supports Jerome Powell as Federal Reserve chair on a day when President Trump once again criticized the central bank boss for not lowering interest rates.
“I think under the circumstances, he’s done an exceptional job, and he’s had an exceptionally difficult time to be there — maybe the most complicated since the 1930s,” Rep. Frank Lucas of Oklahoma said in an interview.
Lucas does not believe that major changes will be made to the structure of the central bank and added that he thinks Powell will serve out the remainder of his term through May 2026, which Powell has also expressed.
“We’ll see who President Trump nominates at that point.”
The positive comments about Powell from a key House Republican demonstrate that the central bank chair does still have some prominent supporters in Congress, despite the recent attacks on his performance coming from the White House.
Trump himself has repeatedly called for the Fed and Powell to ease their policy stance and did so again on Tuesday, saying on Truth Social, “What is wrong with Too Late Powell?”
“No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done,” Trump added.
Read more: How much control does the president have over the Fed and interest rates?
He has made the same points repeatedly in recent weeks, contending that Powell has a history of moving too late on monetary policy.
“‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue,” Trump said in a separate social media post last week.
The White House studied removing Powell from his chairmanship, although Trump earlier this month appeared to rule out that possibility.
Lucas is of the view that the president should be able to speak his mind about Fed policy.
“I would simply say perhaps with the exception of President Eisenhower, every president since 1913 had strong opinions about how the Fed should conduct their business and has used the bully pulpit, the public discussion to try and drive policy,” he said.
“President Trump is well within his rights. I also think that Chairman Powell has a really complicated and hard job.”
‘It’s hard to believe that anything will change’
The Fed is an independent agency from the White House, with a dual mandate from Congress to ensure stable prices and maximum employment.
Lucas — who heads the House’s Task Force on Monetary policy, Treasury Market Resilience, and Economic Prosperity — is leading efforts to review whether the central bank should focus more exclusively on fighting inflation amid a broad review of the central bank.
Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments
When it comes to the structure of the central bank, Lucas said the fundamental nature of the Federal Reserve Act of 1913 is “solid,” referring to the law that established the Federal Reserve System to provide the nation with a safer and more stable monetary and financial system.
Instead, he added, the question becomes whether the Fed’s dual mandate is still relevant. He is not expecting an overhaul.
“My personal point of view, I suspect that while there may be discussion about the employment mandate, it’s hard to believe that anything will change,” Lucas told Yahoo Finance in an interview.
However, he does not oppose some efforts by the Trump administration to exert more authority on some central bank matters outside of interest rates.
In February, President Trump issued an executive order that makes clear that monetary policy will remain under the Fed’s full control but that new financial regulations would need to be cleared with the Office of Management and Budget.
Lucas said the president is right to do so.
“I think the president’s exactly right to advocate that the Federal Reserve system stay with its core mission,” he said. “I also believe the simple answer to rules and regulations from a personal point of view is the Fed shouldn’t be engaged in that, and that would simplify the whole matter.”
Lucas’s task force is set to hold a hearing on Thursday exploring the recent volatility in the Treasury market and its broader market structure.
Lucas said the goal is to explore theories about why investors and traders have caused sudden sell-offs in recent times and to discuss the regulatory changes that would help mitigate the volatility.
“We want the treasuries to be calm, fluid, liquid, deep, and kind of boring,” he said.
Lucas stressed that the Treasury market is moving seven to eight times as much as 30 years ago, with only half the number of primary dealers, which he said have extremely deep pockets that can make the transactions.
“Maybe we’ve just worked ourselves into a more complicated fashion, and with the input of our witnesses and the discussion of the panel, maybe we’ll figure out how to work our way out of this box before we have a real major problem,” he said.
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