Powell's dinner with Trump fuels unease about Fed independence
The timing of Fed Chairman Jerome Powell’s dinner with President Donald Trump was not the best as it fuels some concern in the market about Fed independence, economists said Tuesday.
“At a time when people are wondering about the Fed’s independence, the visit to the White House so soon after the FOMC meeting might contribute to those who suspect that there is an uncomfortably close alignment between the administration and the central bank,” said Carl Tannenbaum, chief economist at Northern Trust.
Trump and Powell dined at the White House Monday night, according to a Fed statement. They were joined by Fed Vice Chairman Richard Clarida and Treasury Secretary Steven Mnuchin.
Many economists are grasping for the reason behind the Fed’s remarkable change of tone at its January meeting. The central bank took further rate increases off the table after only six weeks earlier penciling in two increases in 2019.
Trump has been urging the Fed to move to the sidelines and reportedly was so unhappy with the Fed that he was thinking about replacing Powell.
In a note to clients sent out before the dinner was announced, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he doubted that Powell changed his position because of Trump berating him.
https://www.msn.com/en-us/money/markets/powells-dinner-with-trump-fuels-unease-about-fed-independence/ar-BBTcrID
Double digit inflation here we come.
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