Federal Reserve Chairman Jerome Powell said that he has not yet met with President Joe Biden, illustrating the administration’s caution in approaching matters at the independent central bank.
“I think I’ve shaken his hand but I have not really met him and talked to him,” Powell said in a webinar at the Economic Club of Washington on Wednesday.
In the first three months of his presidency, Biden has had a cautious approach to the Fed. On April 6, he told reporters that he has been “very fastidious” about his communications with the central bank.
Although the members of the Fed’s Board of Governors are appointed by the president, the central bank does not report to the executive branch like other federal agencies do.
“I think the Federal Reserve is an independent operation and starting off my presidency, I want to be real clear that I’m not going to do the kinds of things that have been done in the last administration,” Biden said.
Former President Donald Trump very publicly attempted to influence Fed policy using his preferred medium: Twitter. In at least 100 tweets over the course of his presidency, Trump urged the central bank to slash interest rates while he escalated trade tensions with China.
For Biden’s part, he says he has been interfacing with the Fed via Treasury Secretary Janet Yellen.
Powell said Wednesday that he is continuing the tradition of weekly luncheons with the head of the Treasury, although the pandemic has forced those in-person meetings to phone calls.
Rate hike ‘highly unlikely’ this year
In his public remarks Wednesday, Powell offered little new detail on the future path of monetary policy. The Fed chief reiterated that the central bank will not hike interest rates until it sees a labor market recovery that is “effectively complete” alongside inflation moderately above the Fed’s 2% target for some time.
Asked if the Fed could raise interest rates from its near-zero target this year, Powell said “that would be highly unlikely.”
In the Fed’s most recent round of economic projections, none of the central bank’s 18 policymakers expected an interest rate hike by the end of 2021. The so-called “dot plots” showed four members projecting at least one hike by the end of 2022.
“I think there’s a tendency of markets to focus too much on the dot plot summary of the economic projections,” Powell said. “I would focus more on the outcomes that we’ve described.”
Powell’s remarks on Wednesday are likely the last before the central bank’s next scheduled policy-setting meeting on April 27 and 28.
Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
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