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 that he would not resign even if US President Donald Trump asked him to.
The dovish comments sent US and global stock markets surging higher, recovering some of the territory lost in the past few 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.
Powell once again said that the Fed had no “preset” 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 signaled last month that it expected only two increases this year, rather than three.
There is “no preset path for policy and particularly with the muted inflation themes coming in we will be patient as we see how the economy evolves,” Powell said.
The Fed is also prepared to adjust policy “quickly” and “significantly” to support the economy if needed, he added.