Powell says he's not focused on Trump, support for Fed independence "very high"
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Powell in Sintra last year. Photo: Horacio Villalobos Corbis/Corbis via Getty Images
Federal Reserve chair Jerome Powell said he is not focused on the possibility that former President Trump might be re-elected and could chip away at the central bank's political independence.
Why it matters: When Trump was in office, he publicly lambasted Powell, whom he appointed — once suggesting the central bank chief was a bigger "enemy" than China's Xi Jinping.
- Some in the Trump camp advocate aggressive steps to curtail the Fed's historical independence.
What they're saying: "I do think support for Fed independence is very high where it really matters on Capitol Hill, in both political parties," Powell said Tuesday at a conference in Sintra, Portugal.
- "I worry about getting the job right. That's what I worry about."
What they're saying: Powell pointed to the solid economy where the jobless rate is at a historically low 4%, growth is steady and inflation has been cooling.
- "I think if we can keep things on that path, that's what I am focused on," Powell said.
On fiscal policy, Powell warned about America's big deficits at a time when the economy is at full employment.
- "This is something that should be a top-level issue. It should be a real focus going forward," Powell said. (He would not comment on the possibility of tax cuts if Republicans control both houses of government after 2024.)
Powell spoke alongside ECB president Christine Lagarde and Roberto Campos Neto, president of Brazil's central bank.
- Campos Neto is facing attacks from Brazil's president, who wants interest rates to be low.
The big picture: On inflation, Powell said the latest data suggests the nation is back on a path where price increases are slowing.
Yes, but: "We want to be more confident before we start the process of loosening policy," Powell said.
The intrigue: "We are well aware that if we go too soon, that we can undo the good work we've done in bringing down inflation. And if we go too late, we could unnecessarily undermine the recovery and expansion."
- "We're aware we have two-sided risks now, more so than we did a year ago. That's a big change."
