Trump dines at White House with Fed chairman he's criticized

Lloyd Doyle
February 9, 2019

Markets have been mixed in their response to President Trump's combative State of the Union address while investors shift their attention to any signs for the economy from Federal Reserve chair Jerome Powell.

In a press release, the Fed said Powell "did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook".

The steak dinner took place the day Powell turned 66 and on the eve of his first anniversary as Fed chairman. The Fed is supposed to be independent from politics, and it is hard to remove a Fed governor except for "cause", which has typically been interpreted by courts as egregious wrongdoing.

When asked whether Trump expressed appreciation that Powell had not raised rates earlier this month, Mnuchin said no. "Powell was very clear that he wasn't going to say anything in private inconsistent to what he said publicly", according to Mnuchin.

The White House did not respond immediately to a request for comment about the session.

After raising interest rates for four times in 2018, the central bank on Wednesday left interest rates unchanged as expected, after concluding its first policy meeting this year.

Meetings between a president and Fed chief are rare but not unprecedented.

Overt pressure to follow a specific monetary policy, such as then-President Richard Nixon's demands on Chairman Arthur Burns in 1971 for low interest rates, has tended to be the exception.

Since incidents like the one with Burns, blamed as it was for touching off rampant inflation in the 1970s, presidents have been more wary about trying to intervene on rate policy.

That is, until Trump, who has variously called the Fed "crazy", "out of control", and "my biggest threat".

In addition to the the dinner with Trump, Mnuchin holds regular weekly meetings with Powell to discuss economic issues. "I'm not aware of any Fed chair in my lifetime that hasn't met with the president.And I'm not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate".

Other reports by Iphone Fresh

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