Pelosi Says Trump Threatening Fed Chairman Is ‘Very Wrong’
Trump asked White House lawyers earlier this year to explore his options for removing Powell as Federal Reserve chairman.
(Bloomberg) -- House Speaker Nancy Pelosi defended the independence of the Federal Reserve on Wednesday, following comments from President Donald Trump hinting that Chairman Jerome Powell’s tenure depends on the Fed’s rate decisions.
“The last thing we need is a president threatening the chairman of the Fed” to get interest rates where he wants them, Pelosi told reporters at a breakfast hosted by the Christian Science Monitor. “This is very very wrong.”
Trump asked White House lawyers earlier this year to explore his options for removing Powell as Federal Reserve chairman, Bloomberg News reported Tuesday. That request for a review came as the president repeatedly expressed public frustration with the Fed’s interest-rate increases.
Asked on Tuesday whether he still wants to demote Powell, Trump told reporters: “Well, let’s see what he does.”
The Federal Open Market Committee meets Wednesday, and is likely to hold interest rates steady while opening the door to a cut, according to Bloomberg survey of economists. The decision will be announced at 2 p.m. and Powell will hold a press conference 30 minutes later.
While economic data have been supportive of Fed forecasts to hold interest rates steady, risks to the global outlook are growing. Trump has repeatedly called for a cut, blaming monetary policy for limiting economic growth.
Lawmakers from both parties on Tuesday said the Fed must be free from political influence. Senator Richard Blumenthal, a Connecticut Democrat, said Congress should consider “additional protections for the Fed’s Independence.”
Pelosi didn’t endorse any legislative action, but she did call on Republicans to talk Trump down from his threats regarding monetary policy.
“Fed independence is very important,” Pelosi said. “The last thing we need is politics”
--With assistance from Steve Matthews and Saleha Mohsin.
To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net
To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Anna Edgerton, Larry Liebert
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