WASHINGTON (AFP) – United States (US) Federal Reserve Chairman Jerome Powell tried to reassure financial markets on Friday that rising interest rates were not locked in and reasserted the central bank’s independence, saying he would not resign even if President Donald Trump asked him to.
The dovish comments sent US and global stock markets surging higher, recovering some of the territory lost in recent weeks.
Trump named Powell to the helm of the Fed at the start of the year but has been a frequent and vocal critic, blaming Powell and the Fed for raising rates which he says pose a threat to his economic agenda – an unprecedented public berating that breaks with recent norms.
Asked at an economic conference in Atlanta if he would step down should Trump request his resignation, Powell said, “No.”
He said he had not heard directly from Trump despite the president’s many recent Twitter outbursts, and repeated that the institution remained outside political considerations.
“People should know the Fed has a very strong culture around non-political activity and we are committed to achieving the goals the law gives us in a completely non-political way based on the best thinking,” Powell said.
US and global stock markets have tumbled in recent weeks and 2018 was Wall Street’s worst year in the decade since the global financial crisis amid worries about the slowing world economy, trade tensions and rising interest rates.
And Trump’s attacks added to the jitters, since it could cause the Fed to tighten policy just to prove its independence.
But Powell once again stressed that the Fed had no “pre-set” plan for interest rates and would bide its time to see how the economy evolves.
The Fed’s policy committee raised the benchmark lending rate four times last year but signalled last month it expected only two increases this year, rather than three.