Federal Reserve Chair Jerome Powell asserted the central bank's independence, refusing to respond to President Donald Trump's call for immediate interest rate reductions. The Fed maintained its benchmark interest rate, after Trump urged for cuts during a Davos forum appearance. Powell emphasized the Fed's focus on using its tools to achieve its goals, ensuring the public's confidence in their continued work.
Federal Reserve Chair Jerome Powell remained steadfast in his commitment to the central bank's independence, declining to comment on President Donald Trump 's recent call for immediate interest rate cuts. Powell's response came after the Federal Reserve announced it was keeping the benchmark interest rate steady. Trump, during a virtual appearance at the World Economic Forum in Davos, Switzerland last week, stated, 'I'll demand that interest rates drop immediately.
The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals and really keeping our heads down and doing our work,' Powell said Wednesday. The Federal Reserve, designed to operate independently of political pressure, has faced outspoken commentary from Trump in his previous term. His campaign rhetoric and post-election statements suggest this trend may continue. 'And likewise, they should be dropping all over the world. Interest rates should follow us all over,' Trump said, referring to global interest rates. Powell, initially nominated by Trump in 2018 and now serving his second term, has previously stated he would not resign at Trump's behest and believes the president removing or demoting the Fed chair would be inappropriate. Wednesday's interest rate decision marked the first since Trump's return to the White House. The Fed had previously reduced its benchmark interest rate by a total of 1 percentage point over three consecutive meetings. Despite this, inflation remains above the central bank's 2% target.
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