Federal Reserve Chairman Jerome Powell avoided specifics about the controversies surrounding Fed governors Stephen Miran and Lisa Cook on Wednesday, but emphasized the Fed’s commitment to independence from outside politics.
During a press conference after the Fed announced it was cutting interest rates, Powell declined to delve into the controversy surrounding Miran, who refused to resign from his White House job while also serving at the Fed, and President Donald Trump’s push to fire Cook and replace her over accusations that she committed mortgage fraud.
Before this week’s meeting, Miran, chairman of the Council of Economic Advisers, replaced Fed governor Adriana Kugler, who unexpectedly stepped aside last month. Her term, which Miran is set to serve the remainder of, ends in January. He opted to take an unpaid leave of absence from the White House instead of resigning, which drew criticism.
“So we did welcome a new committee member today, as we always do, and the committee remains united in pursuing our dual mandate goals,” Powell said in response to a question about Miran not resigning. “We’re strongly committed to maintaining our independence, and beyond that, I really don’t have anything to share.”
Democrats have worried that the White House keeping Miran on a leave of absence is a carrot to ensure he does Trump’s bidding on the Fed board in order to return to his job. The White House contends, though, that there will be a bright line of separation between Miran and the White House while he is serving on the Fed board.
FED’S INDEPENDENCE IN FOCUS WITH TRUMP INTERVENTIONS
Miran was the lone dissenting voice at Wednesday’s vote. He preferred the Fed cut rates by a half a percentage point instead of a quarter of a percentage point and indicated that he would like to see five more conventional rate cuts by the end of the year.
“There wasn’t widespread support at all for a 50 basis-point cut today,” Powell said, referring to the half percentage point rate cut that Miran was pushing for.
When asked about what markets should watch to reaffirm that the Fed is still making economic decisions free from political considerations, Powell said that independence and only looking at the data are “deeply in our culture” at the Fed.
“We don’t frame these questions at all or see them in terms of political outcomes,” the chairman said. “I would say we’re doing our work exactly as we always have now. And people, they’re making their arguments and we’re having really a great discussion around these challenging issues.”
Powell was also asked about Cook and the legal saga, although he declined to comment. Federal Housing Finance Agency Director Bill Pulte accused Cook of mortgage fraud, which led Trump to attempt to fire her. But Cook filed a lawsuit, and a judge recently issued a temporary restraining order blocking the firing. The matter is expected to be elevated to the Supreme Court.
When asked whether he sees the Cook case as related to questions about Fed independence, Powell said he sees it “as a court case that it would be inappropriate for me to come comment on.”
In response to a subsequent question about Miran’s influence on monetary policy decisions, Powell pointed out that a dozen individuals vote on monetary policy.
“The only way for any voter to really move things around is to be incredibly persuasive, and the only way to do that in the context in which we work is to make really strong arguments based on the data and one’s understanding of the economy, that’s really all that matters and that’s how it’s going to work,” Powell said.
FED RATE CUTS COULD BRING HOUSING RELIEF SOUGHT BY TRUMP
The press conference came after the Fed announced its long-awaited pivot toward easing monetary policy.
After the two-day meeting in Washington, D.C., senior Fed officials announced they would lower the rate target to a range of 4% to 4.25%, down from 4.25% to 4.50%. Investors widely expected the move at the meeting, which was the most closely watched since Trump began his second term.
