By Nick Timiraos
Federal Reserve Chairman Jerome Powell met with President Trump, who has criticized the central bank dozens of times this year, at the White House on Monday to discuss an economy hindered by faltering global growth prospects.
Mr. Trump has repeatedly stated a low opinion of the job Mr. Powell is doing, calling him a "terrible communicator" and an enemy of the state. The president said the Monday meeting was "very good and cordial" in a statement on Twitter.
Mr. Powell accepted Mr. Trump's invitation, and they were joined by Treasury Secretary Steven Mnuchin, according to the Fed. They met in the White House residence for around 30 minutes, according to a person familiar with the matter.
"Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.," said Mr. Trump.
The central bank said Mr. Powell's comments to Mr. Trump were consistent with his remarks last week, when he expressed optimism that the Fed's interest-rate cuts this year would buoy the U.S. economy against lingering risks, including decelerating global growth and any fallout from uncertainty that has been amplified by the U.S.-China trade war.
"He didn't 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 Fed said in a statement disclosing the meeting on Monday morning.
Fed officials have cut their short-term rate three times since July, most recently in October to a range between 1.5% and 1.75%. Officials lowered rates to cushion the economy against the risks of a sharp slowdown.
Mr. Trump named Mr. Powell to a four-year term that began in February 2018, But he quickly soured on his selection as the central bank continued its campaign to slowly lift short-term borrowing costs. It isn't unusual for the Fed leader to meet with the president, but it is unusual for the president to repeatedly chastise the central bank in public.
Mr. Trump's attacks on the Fed have ended a bipartisan precedent extending to the Clinton administration in which presidents didn't publicly direct the central bank on how to set policy. Mr. Trump has made a habit of mocking the Fed leader on his Twitter feed, with more than 50 posts about the central bank this year.
"They don't have a clue, but I do," Mr. Trump said last month.
In recent months, the president has expressed his envy that some countries with very low growth prospects in Europe have negative interest rates. He has also lamented the relative strength of the dollar against other currencies.
After raising interest rates four times last year, Fed officials have reluctantly lowered interest rates this year. The reversal has highlighted a split on the rate-setting Federal Open Market Committee. Around half of the 12 reserve bank presidents, five of which have a vote at policy meetings, have opposed or voiced reservations about some or all of the cuts.
The Fed also slowed and then stopped a scheme to shrink its $4 trillion asset portfolio earlier this year. It ultimately reversed that effort and began adding very short-term Treasury debt to its holdings last month after money market volatility in September indicated the portfolio runoff may have gone too far.
Mr. Trump's sustained attacks on the Fed have led officials to feel they are fighting not only to shore up the U.S. economy but also to protect the institution's nonpolitical approach to policy-making. The central bank has studiously guarded its independence ever since interference by the White House in the 1960s and 1970s preceded the runaway inflation of the 1970s and 1980s.
"It's very, very important that the public understands that we do our work on a nonpartisan, nonpolitical basis," Mr. Powell told lawmakers last week. "We'll make mistakes. We're human. But we will not make mistakes of character."
On Monday, Mr. Powell told Mr. Trump that he and his colleagues make their rate-setting decisions "based solely on careful, objective and nonpolitical analysis," according to the Fed's summary of the meeting.
Mr. Powell joined the Fed in 2012 after a career in private equity and a stint in the Treasury Department under the administration of George H.W Bush. He has walked a delicate balancing act in recent months in seeking to explain why the Fed was cutting rates to support growth but that the policy wasn't in response to Mr. Trump's demands.
The two men haven't met since Mr. Trump hosted Mr. Powell for dinner at the White House residence in February. Mr. Trump has spoken by phone with Mr. Powell three times this year, for around five minutes each, most recently in May, according to Mr. Powell's public calendar.
Unhappy with Fed rate increases and stock market declines last December, Mr. Trump wondered aloud to his advisers about whether he could replace Mr. Powell, according to people familiar with the matter. His advisers later clarified that Mr. Powell's job was safe because he couldn't be dismissed over a policy disagreement.
Mr. Trump reacted disapprovingly to Mr. Powell's comments about the importance of the Fed's independence this summer. "He's trying to prove how tough he is because he's not going to get pushed around," Mr. Trump said in June. "Here's a guy, nobody ever heard of him before and now, I made him, and he wants to show how tough he is."
Write to Nick Timiraos at email@example.com
(END) Dow Jones Newswires
November 18, 2019 13:40 ET (18:40 GMT)
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