Three weeks ago, Jerome H. Powell delivered a closely watched speech to central bankers, government officials and academics attending the Federal Reserve’s annual conference in Jackson, Wyo.
The Fed chair had been through an eventful few weeks. President Trump had flirted with firing him and then showed up for a rare visit at the central bank. One of the Fed’s seven governors had resigned unexpectedly. And as Mr. Powell made his way to Jackson Lake Lodge to deliver his remarks, Mr. Trump was demanding the resignation of another governor, Lisa Cook, over unproven allegations of mortgage fraud.
Each of these events on its own was destabilizing. Together, they represented the most direct infringement on the central bank’s independence in decades. Hanging in the balance was the Fed’s ability to set monetary policy free from political meddling, a longstanding separation that had become the backbone of the world’s largest economy.
Mr. Powell’s speech disregarded that threat. He deviated little from remarks that had been in the works for weeks, talking instead about the economic outlook for the United States, the trajectory for interest rates and the central bank’s blueprint for setting monetary policy. Never once did Mr. Powell utter anything about the Fed’s independence.
The omission did not go unnoticed, especially by those who had hoped the central bank would be louder in its opposition to what they viewed as an aggressive assault on the institution. But they had also grown accustomed to the Fed being exceedingly cautious about anything that involved Mr. Trump.
That prudence, which has only intensified since Mr. Powell’s speech, aligned with the Fed’s now decade-old playbook for handling a president who has made no secret of his desire to control the central bank and its power to set interest rates.
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The post The Fed Tried to Avoid a Fight With Trump. It Got One Anyway. appeared first on New York Times.
