(Washington) The president of the American Central Bank, the Fed, Jerome Powell, insisted on Thursday that the institution responsible for monetary policy was independent, and that the executive power could not influence it, while the election of Donald Trump raises concerns.
Published yesterday at 3:13 p.m.
The Fed’s decisions “cannot be overturned by any other part of the government, except, of course, Congress,” Jerome Powell said during a question-and-answer session in Dallas, Texas.
Donald Trump has not hidden his desire to influence the decisions of the central bank, which raises and lowers rates according to economic developments. In August, he felt that “the president should at least have his say”.
When the institution began a first rate cut in September, less than two months before the November 5 election, Donald Trump accused it of playing the game of the Democratic candidate. Already during his first mandate, he had broken with custom and commented on these decisions.
“We don’t think, when we make our decisions, about the well-being of a political party or anything like that. We are just looking at the macroeconomic aspects and doing our best,” assured Jerome Powell.
Thursday morning, it was a Fed governor, Adriana Kugler, who gave a speech in which she insisted on the need to have an independent central bank.
Economic “performance”
Jerome Powell also praised the performance of the American economy on Thursday: “the recent performance of our economy has been remarkably good, by far the best of all the major economies in the world.”
GDP growth almost twice as high as in the euro zone, unemployment rate still low, and inflation which has fallen drastically: the health of the American economy remains very good, having simply cooled after a period of overheating.
“The economy is not sending any signals that we need to rush to lower rates,” he said, adding that “the current strength of the economy gives us the opportunity to approach our decisions with caution.” .
The US Federal Reserve lowered its rates on November 7, for the second time in a row. These are now in the range of 4.50 to 4.75%.
Its next meeting will take place on December 17 and 18, and a further drop of a quarter point is expected by market participants, according to the CME Group assessment.
“Inflation is getting much closer to our long-term goal of 2%, but it’s not there yet. We are committed to finishing the work,” noted Jerome Powell, warning of “a sometimes bumpy trajectory” to be expected.
Inflation also rebounded in October, for the first time since March, to +2.6% over one year compared to +2.4% in September, according to the CPI index.
As for employment, the labor shortage is decreasing, and the unemployment rate remains very low, at 4.1%. “The labor market has cooled to the point where it is no longer a source of significant inflationary pressures,” welcomed Jerome Powell.