President Donald Trump met with Federal Reserve Board Chairman Jerome Powell, one of his favorite punching bags, in a surprise meeting that was left off the President’s public schedule Monday.
While Trump called Powell a “naive” “bonehead” mere weeks ago, the Federal Reserve Board said that the meeting occurred “at the President’s invitation.”
“Chair Powell’s comments were consistent with his remarks at his congressional hearings last week,” the statement reads. “He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy.”
The statement is in direct contradiction to a tweet Trump fired off 20 minutes later, where he asserts that he and Powell did discuss future interest rates.
Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.
— Donald J. Trump (@realDonaldTrump) November 18, 2019
The final sentence of the Fed’s statement read as a rebuke of Trump’s perpetual pressure on Powell.
“Finally, Chair Powell said that he and his colleagues on the Federal Open Market Committee will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.”
Trump is hung-up on the idea of a negative interest rate, a move that has never been enacted in the United States. It would entail banks paying customers to take out loans in an effort to jumpstart spending when an economy is in a prolonged slump.
The U.S. economy is doing well at the moment, a so-called “Goldilocks economy” that is neither too hot and causing inflation, nor too cold and causing recession. Trump has reportedly been anxious about the chance of an upcoming recession, though Bloomberg has the chances of the economy collapsing into one in the next 12 months at just 26 percent, citing hopeful signs like the labor markets.
Powell unequivocally dismissed the idea of instituting a negative interest rate while speaking to Congress’ Joint Economic Committee last week.
“You tend to see negative rates in larger economies at times when growth is quite low and inflation is quite low,” Powell said. “It’s just not the case here,” adding that negative interest rights would not be “appropriate” in the current climate.
Trump tends to blame Powell for every economic disappointment he faces. He has been none too subtle about his desire to get rid of him, though it’s not legally clear if he can.