Powell ignores Trump, sees no need for Fed to cut rates

Federal Reserve Chairman Jerome Powell on Wednesday blew up market hopes that the central bank might cut interest rates, ignoring pressure from President Donald Trump and causing stocks to tumble. Powell said the central bank believes that inflation, which has been coming in below the Fed’s 2 percent target, is being held down by “transient” factors, such as portfolio management services, lower apparel prices and airfares. That means the Fed still thinks it can sit back and have inflation move back up toward 2 percent without needing to give it an extra boost. “We don’t see a strong case for moving [rates] in either direction,” he said in a press conference after the Fed’s meetings this week in which the central bank left rates unchanged. The economy is experiencing roughly 1.5 percent inflation by a couple of different measures. The Dow Jones Industrial Average fell 163 points. Powell’s comments are in contrast to calls by Trump and White House economic adviser Larry Kudlow to slash rates, even as the economy grew a better-than-expected 3.2 percent in the first three months of the year. Trump has said he thinks the economy could grow 4 percent or more for years. The economy would go “up like a rocket if we did some lowering of rates, like one [percentage] point,” Trump tweeted on Tuesday as the Federal Open Market Committee began its two days of meetings. That big of a rate cut would reverse all four of the Fed’s rate hikes last year. Trump also called for the Fed to resume its bond-buying program, undertaken during and after the 2008 financial crisis to jump-start the economy and the housing market. Asked about those remarks, Powell reiterated that the central bank is a “nonpolitical institution.” “That means we don’t think about short-term political considerations,” he said. “We don’t discuss them.” He also wouldn’t comment on Stephen Moore, Trump’s embattled pick for an open seat at the central bank. “It’s not really my role to engage with potential nominees to the Fed,” Powell said. Article originally published on POLITICO Magazine Source: https://politi.co/2Y1bMfM Droolin’ Dog sniffed out this story and shared it with you. The Article Was Written/Published By: vguida@politico.com (Victoria Guida) ! #Headlines, #BusinessNews, #Economy, #Money, #Political, #Politico, #Trending, #Trump, #Newsfeed, #syndicated, news http://bit.ly/2UT3gOb
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