Fed chair sees strength in the US economy, even as Fed cuts rates to support stable growth
Federal Reserve Chair Jerome Powell expressed a positive outlook on the US economy following the central bank’s recent interest rate adjustment, according to CNBC.
After trimming the interest rate by a quarter point to a target range of 4.5 percent to 4.75 percent, Powell conveyed optimism, saying he was “feeling good” about economic conditions.
He explained that the Fed’s approach to future policy would be guided by incoming data rather than assumptions about the potential impact of new fiscal policies.
At a press conference held after the Federal Reserve’s two-day policy meeting, Powell fielded questions about his tenure and the central bank’s independence.
When asked directly if he would resign at President Trump's request, Powell’s response was definitive: “No.”
He clarified that, legally, the president does not hold the power to fire the chair or other senior Fed officials, as reported by BNN Bloomberg. This stance highlights Powell’s commitment to preserving the Federal Reserve’s autonomy, a priority he has consistently upheld since his 2018 appointment.
Powell’s remarks also come amid rising political pressure from Trump, who, despite appointing Powell, has repeatedly criticized his handling of interest rates. Trump has argued that the president should have a greater influence over monetary policy decisions.
However, Powell has made it clear that he is committed to completing his term, which ends in 2026.
The Federal Reserve’s recent rate cut marks the second in a series of adjustments aimed at stabilizing the economy.
Though the Fed remains open to additional rate cuts, Lindsey Piegza, chief economist at Stifel Financial Corp., observed that Powell has “left the door open for a potential policy pause” at the December meeting.
This decision, Powell noted, will ultimately depend on forthcoming economic indicators, with the Fed’s focus remaining on maximum employment and price stability.
According to BNN Bloomberg, Powell’s refusal to yield to political pressure underscores his belief in the importance of an independent central bank.
In a commentary on the situation, Peter Conti-Brown, a Wharton professor, and Fed historian, remarked that Powell’s firm stance sends a message that the Fed’s leadership remains unified in upholding its mandate, regardless of political influences.
Powell echoed this sentiment, saying that “the Fed’s leadership is all in this together” and emphasizing his dedication to the institution.
While Powell has largely avoided commenting on the Trump administration’s economic strategies, he indicated that the Fed’s future policy choices would be data-driven and unimpacted by external demands.
CNBC reports that Powell underscored his reluctance to speculate on trade or fiscal policies, reiterating that the Fed’s decisions will hinge solely on the economic data.
Political dynamics may, however, place further strain on the Fed’s leadership structure.
BNN Bloomberg noted that vice chair for Supervision Michael Barr, the Fed’s top banking regulator, has faced criticism from Republican leaders and may see his role scrutinized.
Senator Bill Hagerty hinted that the administration could consider “any legal option” regarding Barr’s position. These developments suggest potential shifts in the Fed’s regulatory landscape under Trump’s influence.
While the economic outlook remains relatively strong, Powell acknowledged the potential impact of Trump's proposed tariffs, immigration policies, and tax cuts.
These measures, as reported by CNBC, could contribute to inflationary pressures, influencing the Fed’s long-term rate policies.
Powell, however, remained steadfast in his commitment to base the central bank's strategies on solid data, adding, “We’ll make a decision as we get to December,” as the Fed continues to analyze economic indicators.
