Wednesday, 20 January, 2021

Fed Chair Powell says he would not quit if Trump asked

A currency trader walks by the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul South Korea Monday Fed Chair Powell says he would not quit if Trump asked
Ginger Lawrence | 10 July, 2019, 20:39

The pound's woes are purely sentiment-based with Brexit uncertainty still weighing and economic concerns likely to see the United Kingdom economy contract in Q2.

Although the United States economy expanded by a solid 3.1 percent in the first three months of the year, the Fed chief said that growth was based on factors, like exports, "that are not generally reliable indicators of ongoing momentum".

"Uncertainties about the outlook have increased in recent months", Powell said in the text of his remarks.

Investors expect the Fed will cut its benchmark rate, now in a range between 2.25% and 2.5%, by a quarter percentage point at its 30-31 July meeting. And after a tepid job gain in May, U.S. employers sharply stepped up their hiring in June, an indication of the economy's durability. She tells Powell that it was essential that he and other Fed official refuse to "submit to these high pressure tactics".

However, as Powell noted, "crosscurrents" concerning trade policies and global growth have reared their head.

The Fed last cut rates in 2008 at the height of the financial crisis. -China trade war and agreed to resume talks toward a deal that would meet the administration's demands to better protect USA technology. As the economy recovered the central bank began slowly raising rates.

Powell has been under vast pressure from Donald Trump to cut rates.

"Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture reported heightened concerns over trade developments". The president has repeatedly accused Powell of keeping credit too tight for too long and of thereby holding back the economy and the stock market, and the president's counselors maintain that he has the power to fire the chair while claiming that no firing is forthcoming.

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"I've said what I've meant to say on the subject", Powell said.

"Of course, I would not do that", Powell replied.

"I hope everyone heard that."

Powell said any regulatory review of the recently announced project should be "patient and careful", while acknowledging digital currencies do not neatly fit within existing rules.

"There's no immediate need to move rates in either direction at this point in my view", Federal Reserve Bank of Philadelphia President Patrick Harker said in an interview with the Wall Street Journal on Monday.

Federal Reserve Chairman Jerome Powell says that Facebook's new digital currency, Libra, "raises many serious concerns" and will be closely monitored by USA and overseas regulators.

Powell chose not to reshape market expectations, which were leaning heavily toward a July cut of 25 bps, further illustrating that the Fed is not willing to fight market sentiment following the clumsy execution of its final rate hike in the fourth quarter of previous year.

- CBS News' Irina Ivanova contributed reporting.