Jul 17, 2019

Jerome Powell leans into greater openness

Photo: Eric Piermont/AFP/Getty Images

In one of his final speeches before a big policy meeting this month, Fed Chair Jerome Powell gave another hint that a rate cut is coming and stressed the importance of communicating frankly with the public.

Why it matters: The financial markets may have backed Powell into a corner to cut interest rates, but these days Main Street has his ear, too.

  • In a novel series of public forums held the past few months, community leaders across the country have told Fed officials about the unevenness of the economic recovery.
  • Since the latest "Fed Listens" event in Chicago, Powell has referenced this grassroots feedback in nearly every single public appearance to underscore the importance of extending the record-long economic recovery.

What he's saying:

Gone are the days when the Federal Reserve Chair could joke, as my predecessor Alan Greenspan did, "If I turn out to be particularly clear, you've probably misunderstood what I said." Central banks must speak to Main Street, as well as Wall Street, in ways we have not in the past, and Main Street is listening and engaged.
— Powell's speech Tuesday at G7 Bretton Woods in Paris

The big picture: Powell, who is more plainspoken than his predecessors, has emphasized the importance of forthright communication since he took the helm of the Fed. He has doubled the number of post-policy meeting press conferences, and, under his direction, the Fed is for the first time publicly reviewing the way it communicates — among other things — to carry out its mandates.

  • Powell has picked up on "the strong sense of transparency" carried out by Janet Yellen and Ben Bernanke, former Fed economist Jeffrey Bergstrand tells Axios.
  • Yes, but: Powell hasn’t been without his own communication missteps. He "gives a little bit more color than his predecessors, and sometimes that can be risky," says Michael Reynolds of investment management firm Glenmede Trust. "There were slip-ups like, 'we're a long way from neutral.'"

The bottom line: In the midst of the longest expansion on record, the central bank is about to make a move that is normally done only in dire economic situations. This will leave the Fed with less flexibility if a recession does come — setting up a situation in which communication is more important than ever.

  • "Powell has done a good job conveying they are pursuing a little bit of insurance," says Bergstrand.

Go deeper: The case for a Fed rate cut

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 4 p.m. ET: 5,463,392 — Total deaths: 344,503 — Total recoveries — 2,195,325Map.
  2. U.S.: Total confirmed cases as of 4 p.m. ET: 1,653,904 — Total deaths: 97,948 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: Italy reports lowest number of new cases since February — Ireland reports no new coronavirus deaths on Monday for the first time since March 21 — WHO suspends trial of hydroxychloroquine over safety concerns.
  4. 2020: Trump threatens to move Republican convention from North Carolina — Joe Biden makes first public appearance in two months.
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: New York stock exchange to reopen its floor on Tuesday — White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy

Italy reports lowest number of new coronavirus cases since February

Italy’s aerobatic team Frecce Tricolori fly over Milan in Duomo Square on May 25. Photo: Francesco Prandoni/Getty Images

The Italian government reported 300 new cases of coronavirus on Monday, the lowest daily increase since Feb. 29.

Why it matters: Italy, the first country in Europe to implement a nationwide lockdown after emerging as a hotspot in March, appears to have finally weathered its coronavirus outbreak. Italy has reported nearly 33,000 total deaths, the third-highest total behind the U.S. and U.K.

Joe Biden makes first public appearance in over two months

Photo: Oliver Douliery/AFP via Getty Images

Former Vice President Joe Biden made his first in-person appearance in over two months on Monday to honor Memorial Day by laying a wreath at a Delaware veterans park, AP reports.

Why it matters: Biden, the Democratic Party's presumptive nominee, has taken the unprecedented step of campaigning from his home during the coronavirus pandemic, ever since canceling a rally in Cleveland on March 10.