Powell’s farewell to unchanged rates and the defense of the Fed’s independence

It’s one greeting with institutional continuity and one demand for central bank independence yesterday’s Jerome Powellwhich in press conference following the decision of board to maintain the unchanged rates for the third consecutive meetingbetween 3,5% and the 3,75%announced that he will remain in Board come governorwhile maintaining a role low profile and without turning into a shadow president during the successor’s term of office Kevin Warsh.

Powell entrusted his leave has a strong message of trust nell’institutionsaying he is certain that the Federal Reserve will continue to operate “with objectivity, integrity and a deep I commit at the service of American people“, While Wars is preparing to collect theinheritance in a phase of strong political pressure on the monetary policy.

Rate decision and economic framework

The choice of Federal Open Market Committee to leave the target range remains unchanged sui federal funds confirm a prudent approach. The Fed found that theUS economy continues to expand a solid rhythmeven in the presence of a job market less dynamic and of ainflation Still highpowered by rise in energy prices linked to tensions in the Middle East.

Uncertainty and future data

In his last speech from chair, Powell insisted that the economic framework remains marked by “un high level of uncertainty on economic prospects” and that every future rate decision it will depend on “incoming data, evolution of perspectives e risk balancing“.

Defense of the Fed’s independence

Powell he also strongly defended theautonomy of the central bankwarning that the institutional and legal attacks against the Fed risk compromising the capacity dell’institution to lead the monetary policy without political interferencedefining this principle essential for public credibility from the Federal Reserve.

Internal dissent and succession

The meeting it ended with a internal dissent unprecedented, which had not been recorded sinceOctober 1992: quattro of the twelve members of the board they opposed the decisionWhile three they supported the pause on rates without supporting a orientation verso future cuts. Powell leave one like this Fed called to defend their own independence in a economic and political context complex, reiterating that “there is always and only one chairman of the Federal Reserve“, and that, once confirmed, Wars will fully guide theinstitution.