Powell Sticks to His Lane, Frustrating Reporters
Federal Reserve Chairman Jerome Powell did a fine job at his press conference Wednesday of staying out of the way of politics despite being peppered with questions from reporters practically begging him to weigh in against President Donald Trump’s policies.
The financial press has been pushing the narrative that Trump and Powell are headed for a clash ever since election day. The trouble with this idea is that there’s so little evidence to support it. Trump and Powell are largely in agreement about monetary policy, arguing that the Fed is likely to have room to lower interest rates so long as inflation declines toward the Fed’s two percent target.
When Trump spoke out about monetary policy to the attendees of the World Economic Forum at Davos, he said that if his energy policy succeeds in lowering inflationary pressures he would demand that the Fed reduce interest rates immediately. The financial press largely ignored the first part of that statement—the part about abundant energy lowering inflation—insisting that Trump had demanded an immediate rate cut and trying to push around the Fed.
At the press conference on Wednesday, the Fed chair was asked several questions that were designed to provoke criticism of Trump. Time and again, however, Powell refused to take the bait. He refused to criticize Trump’s deportation efforts. He said the Fed would have to wait to see what tariff policy was adopted and what effect it would have on the economy. “There are so many variables. We are just going to have to wait and see,” Powell explained to the reporters.
Would Powell resist the Trump administration’s DEI policies? Nope. “We are working to align our policies with the executive orders as appropriate and consistent with applicable law,” Powell said.
The craving for a Trump-Powell fight was so strong that Bloomberg’s liveblog reported a non-event: Trump had not posted anything to social media about Powell’s press conference.
Enda Curran of Bloomberg sounded positively exasperated with Powell’s refusal to follow the script. “Powell probably bought himself a bit of time by saying it’s still too early to assess the new policies, but that will wear thin with every passing month. The new administration is up and running and the policy missives are flying — the Fed won’t be able to ignore that,” he wrote in the Bloomberg liveblog.
Although we’ve frequently been critical of Powell, he deserves praise for his understanding that maintaining Fed independence requires the central bank to stay out of politics. When asked by a reporter on Wednesday about why the Fed left some globalist outfit called the Network for Greening the Financial System, a coalition of central banks and financial supervisors that aims to enhance the financial system’s role in managing climate-related and environmental risks, Powell explained that dealing with climate change was not part of the Fed’s mandate.
Trump eventually did take to Truth Social to comment on the Fed and criticize Powell. Importantly, however, he did not criticize the Fed’s decision not to cut rates.
Media Hears Grimdark, America Hears Golden Age
Speaking of not following the script, Americans are refusing to believe the media’s claims that Trump’s inaugural speech “painted a grim portrait of the country” (as the New York Times put it) or was a “thundering, dark” address (as Vanity Fair claimed).
The latest polling from YouGov for the Economist found that 68 percent of American adults who watched some part of Trump’s speech say it was optimistic. Just 19 percent say it was pessimistic. Sixty-two percent said the speech was either outstanding (41 percent) or above average (21 percent). (It would have been interesting to ask people who didn’t watch the speech whether they thought it was optimistic or pessimistic.)
The media heard—or claims to have heard—grimdark Trump, but America heard Golden Age Trump.
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