Federal Reserve System

"Almost all" Fed officials supported removal of "accommodative" language

Federal Reserve Chairman Jerome Powell standing at a podium at a press conference.
Fed chairman Jerome Powell at a press conference in September. Photo: Saul Loeb/AFP via Getty Images

The decision to remove the long-standing "accommodative" language from the Federal Reserve's policy statement was not unanimous among officials, according to the minutes from the Fed's latest policy meeting.

Why it matters: There was a ton of speculation that dropping the language meant the Fed was getting closer to a neutral rate, which would not speed or slow economic growth. Per the minutes, officials argued that waiting to revise the statement would convey a "false sense of precision" about the neutral rate. They also thought the decision would fail to "signal a change" in the expected interest rate hike path.

Larry Kudlow says Fed chairman is "having a bit of a revolution"

Larry Kudlow speaking to reporters.
Photo: Oliver Contreras for The Washington Post via Getty Images

President Trump's top economic advisor Larry Kudlow spoke out about Federal Reserve chairman Jay Powell, in an interview with Fox Business on Wednesday:

Quote  Powell is having a bit of a revolution at the Fed.  He’s throwing out the Fed models.  That’s very important.
— Larry Kudlow, National Economic Council Director

Why it matters: President Trump, who nominated Powell, believes the Fed is raising rates too quickly. Kudlow and others maintain that Trump's outspokenness about the Fed doesn't interfere with the central bank's independence, but this quote is puzzling. The White House has not yet responded to a request for clarification.