Jerome Powell is about as prepared to bear criticism from President Trump over his conduct of monetary policy as any Federal Reserve chairman could possibly be.
In addition to being Trump’s own appointee — and receiving votes of confidence from Trump and the administration concurrently with the president’s complaints — Powell has support on both sides of the aisle in Congress. He also has prepared, during his few months in office, for the kind of scrutiny he is now receiving.
The depth of his congressional backing was on full display this week as he testified before the House and Senate.
Powell, who has invested extra time into meeting with lawmakers, drew votes of confidence and even compliments from Democrats as well as Republicans during the smooth two-day tour of Capitol Hill. Fed leaders don’t always receive bipartisan support — Janet Yellen, for instance, met considerable partisan opposition from Republicans.
Since Powell’s nomination, too, he has taken special care to guard the Fed’s freedom to set interest rates and control the money supply without political considerations.
During his confirmation hearing, he pledged to Sen. Sherrod Brown of Ohio, the top Democrat on the Banking Committee, that he would conduct monetary policy “without a view to political outcomes but with a view solely to the right answers.”
On Thursday, after Trump’s first round of criticism of the Fed’s rate hikes, Brown reiterated that he takes Powell at his word.
Powell was in Buenos Aires Friday for the G-20 meeting of finance ministers and central bankers. Fed representatives declined to provide comment on Trump’s remarks. Instead, they pointed to past statements he’s made on the topic — including a warning earlier this year that the central bank cannot take its independence for granted.
And just last week, Powell said in an interview that he is not concerned about political interference. “I would add though that no one in the administration has said anything to me that really gives me concern on this front,” he said.
Powell has “been very careful thus far, as most Fed chairs are, to stay in the Fed’s lane,” said Shai Akabas, the director of economic policy for the Bipartisan Policy Center, “And I think he has a good sense of what that lane is.”
Akabas, who worked with Powell before he joined the Fed, said that Powell was not likely to be perturbed by the sudden injection of politics into his work.
“I’ve always found him to be calm and level-headed in situations where there’s a lot of pressure and where there’s a lot of different things being thrown at him,” he said.
In fact, Trump’s remarks might prove most difficult not for Powell, but for Trump’s pending Fed nominees who will now have to face more focused questions from senators regarding whether they will favor lowering interest rates out of deference to the president.
Currently, three nominees are awaiting votes in the Senate: Richard Clarida to be vice chairman, and Marvin Goodfriend and Michelle Bowman for other spots on the seven-member board of governors. Trump has yet to name a nominee for the remaining open position.
In all, though, the Fed is likely to weather the negative attention as it has in the past, suggested Brookings fellow Aaron Klein, who noted that past presidents have also criticized Fed policies they didn’t like.
Trump’s motivation for speaking out probably wasn’t to take control of monetary policy, Klein speculated, but instead to create headlines in order to draw attention away from the political fallout from his press conference with Russian President Vladimir Putin in Helsinki earlier in the week.
“He figured out that one or two scandals can be deadly, and 1,000 scandals is just noise,” Klein said. “It really is a brilliant insight into this moment in time.”
