Powell's Final Fed Meeting: Rates Unchanged, Will Remain Governor

In what marks the final monetary policy meeting of his tenure as Federal Reserve Chair, Jerome Powell announced on Wednesday that the benchmark interest rate would remain unchanged. This decision underscores the growing concerns within the Fed regarding escalating inflation. Powell also revealed his intention to continue serving as a Fed governor, a move he stated is crucial to shield the central bank's independence from what he perceives as potential interference from the Trump administration.

“

I will act in a low-key manner as a governor and do not intend to play the role of a 'dissenter' who breaks unity after the new chairman, Kevin Warsh, takes over.

Powell indicated that he would adopt a low-profile approach as a governor and does not intend to be a dissenting voice after the new chair, Kevin Warsh, takes over. Warsh, nominated by President Trump, has received approval from the Senate Banking Committee and is expected to be confirmed by the full Senate soon. Powell's term as Chair is set to conclude on May 15th.

The Fed Chair expressed deep concern over a series of legal actions initiated by the Trump administration, including attempts to dismiss Fed Governor Lisa Cook and a criminal investigation targeting Powell himself. He argued that these actions threaten the credibility of the central bank's decision-making process and undermine the 'clear principles' that should guide interest rate decisions, thereby jeopardizing the central bank's insulation from short-term political interests and electoral politics.

“

These actions threaten the credibility of the central bank's decision-making process and undermine the 'clear principles' that should guide interest rate decisions, thereby jeopardizing the central bank's insulation from short-term political interests and electoral politics.

Powell characterized these government legal actions as unprecedented and warned that further threats could erode the Fed's independence. This independence, he stressed, is paramount for the public's trust in the central bank's ability to set monetary policy free from political considerations. While not opposing President Trump's frequent calls for lower interest rates, Powell strongly objects to the legal measures aimed at compelling the Fed to comply with such demands. His own term as a Fed governor extends until January 2028, coinciding with the end of President Trump's term, and he hopes for a return to established legal norms and practices that ensure the Federal Reserve System can independently fulfill its duties.

“

I hope that the United States will re-adhere to legal norms and established practices, allowing the Federal Reserve System to independently fulfill its duties.