Senate Finance Chairman Backs Powell After Trump Faults Fed Chief
(Bloomberg) -- The chairman of the Senate Finance Committee stood by Federal Reserve Chairman Jerome Powell after President Donald Trump said he “maybe” regrets appointing him because the Fed has increased interest rates.
Asked whether Powell and the Fed are doing a good job, Senator Orrin Hatch said Wednesday in Washington: “I think so. I think they all are, to be honest with you. I don’t agree with everything they do but they are still pretty good people.”
Hatch of Utah, the longest-serving Republican senator, stood by the Fed’s independence. “They have a right to act the way they do,” Hatch said.
Almost a year since nominating Powell to the post, Trump told the Wall Street Journal in an interview Tuesday that he was intentionally sending a direct message that he wanted lower interest rates, even as he acknowledged that the central bank is an independent entity. Trump demurred when asked under what circumstances he would fire the central bank chief.
Trump said in the interview that Powell “almost looks like he’s happy raising interest rates” and that it’s “too early to tell, but maybe” he regrets appointing him.
Powell has so far brushed off the attacks, noting the Fed is independent and arguing that by raising rates gradually it’s just seeking to normalize monetary policy in an “extraordinary” economy. He’s also suggested that the central bank needs to keep its eye on possible financial froth -- the trigger for the past two recessions -- as well as inflation for signs of overheating.
Asked on Wednesday about the president’s broadside against the central bank, Senator Mike Crapo of Idaho declined to comment about whether he’s pleased with Powell. “I’m not going to get get into that issue,” said Crapo, chairman of the Senate Banking Committee, which oversees the central bank.
Senator Pat Toomey, a Pennsylvania Republican who is a member of the Banking Committee, “believes the Fed should have begun to normalize interest rates several years ago,” said Steve Kelly, a spokesman. “He commends Chairman Powell for sticking to a transparent path to normalization.”
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