Going hard against Trump? Powell emphasizes the independence of the Federal Reserve, refuses to make commitments on future interest rate paths.

Federal Reserve Chairman Powell said at a press conference on Wednesday that the Fed will continue to maintain independence in monetary policy decision-making, emphasizing that it will not actively seek meetings with any president and refusing to make specific commitments on future interest rate paths, highlighting the uncertainty of policy in the current economic situation. When asked if he would actively seek a meeting with Trump, Powell clearly stated, "That is not something the Fed Chairman should do. I have never done it and cannot imagine doing it." He further pointed out that the central bank does not need to provide advice to Congress on fiscal policy, just as the Fed does not want Congress to interfere with monetary policy. However, Powell also warned that the U.S. fiscal situation is on an "unsustainable path," and Congress has a responsibility to formulate a plan to bring the federal debt back to a sustainable path. During Powell's tenure, Trump has publicly criticized him multiple times, accusing his rate hike policy of harming the U.S. economy, and even at one point calling him the "enemy of the American economy." There have been recent reports that the White House is studying how to dismiss Powell, but Trump later publicly stated that he has "never intended" to remove Powell from his position. Despite this statement, Trump continues to urge the Fed to cut interest rates. When asked about the risks facing the economy, Powell admitted that the risks of inflation and unemployment rising were both increasing, and the Fed needs to balance between the two. He emphasized that the Fed will closely monitor these two key variables (inflation and employment) and make policy adjustments when necessary, stating, "If we see a significant deterioration in the job market, of course we will take supportive action." Recent data show that the U.S. unemployment rate in April was 4.2%, still within the mainstream estimate of "maximum employment." However, compared to last year, the Fed has shown a higher tolerance, allowing some slowing down in the job market to combat persistently high inflation. Facing the market's high expectations of rate cuts, Powell said that the Fed is currently adopting a "wait-and-see" strategy and will not adjust rates in anticipation of economic slowdown. He pointed out that due to the significant uncertainty in variables like trade policy and tariffs, the Fed "cannot predict how data will evolve in advance," so they will "wait for clearer data signals before deciding on policy direction." Regarding the preliminary data showing a 0.3% annualized contraction in GDP in the first quarter, Powell believes that this result was mainly distorted by fluctuations in exports. He pointed out that if these abnormal factors were excluded, the fundamental strength of the U.S. economy remains robust, with private consumption and government spending still growing at an annualized rate of 3%. Powell also responded to criticisms from outside about the Fed's "mission creep," especially in dealing with climate change and implementing quantitative easing policies. He stated that the Fed's unconventional measures taken during the COVID-19 pandemic were under "emergency conditions," welcoming public questioning and admitting that "communication on quantitative easing could indeed be done better." He also acknowledged that in hindsight, the Fed could have tapered QE "earlier and faster." Regarding the issue of climate, Powell reiterated that the Fed will not act as a "climate policy maker" and its responsibilities in this area are very limited. He emphasized, "We have done very little on the climate issue." In discussing the outlook for the U.S. economy, Powell pointed out that inflation is slightly above the 2% target, but "core inflation is in good shape" and the labor market is close to full employment, so the Fed currently "does not need to act hastily" and policy tools are "adequately prepared." However, he also warned that if the Trump administration's announced large-scale tariffs are implemented, it may push up inflation, drag down economic growth, and lead to rising unemployment. As for the possibility of a "soft landing," Powell chose to evade. He stated that although inflation has significantly fallen from its peak and the job market is trending towards normal, given the uncertainty of tariffs and fiscal policy, "it is currently difficult to judge whether the Fed can achieve price stability without sacrificing employment." Powell summarized at the press conference, "We are in a complex situation. The risks of inflation and employment are both rising, and we will continue to remain vigilant and make adjustments based on data."