Larry Kudlow says Fed Chair Powell's job is safe 'at the present time'
Federal Reserve Chairman Jerome Powell’s job is safe – at least for the time being – despite outward pressure and criticism from President Trump.
“I will say that unequivocally, at the present time, yes he is safe,” Larry Kudlow, the president’s chief economic adviser, told CNBC on Tuesday.
Kudlow also said the White House is making “no effort” to remove the head of the U.S. central bank from his post.
The president has repeatedly pressed the Fed to lower interest rates – which most traders think could happen at the end of July – while denouncing policymakers' decision, in December, to raise the benchmark federal funds rate (the fourth time they did so in 2018).
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Trump went after the Fed again last week, lambasting it as the “most difficult problem” facing the country.
“They raised rates too soon, too often, & tightened, while others did just the opposite,” Trump wrote in a tweet. “As well as we are doing from the day after the great Election, when the Market shot right up, it could have been even better - massive additional wealth would have been created, & used very well. Our most difficult problem is not our competitors, it is the Federal Reserve!”
Reports also emerged in mid-June that the White House was exploring the legality of demoting Powell, after Bloomberg News reported that the Trump administration had looked into firing the Fed chair in February.
“I’m not going to comment,” Kudlow said at the time. “It happened six months ago, and it’s not happening today, and therefore I have nothing to say about it.”
Most recently, at its June policy-setting meeting, the Fed suggested a rate cut could happen in July, though noted it ultimately depended on uncertainties surrounding the U.S.–China trade war, as well as persistent muted inflation.
But a blockbuster June jobs report -- the U.S. economy created 224,000 jobs, versus the expected 160,000 -- raised questions about whether a rate cut was really necessary.
“A 25-basis point insurance cut is still on the table in July, but beyond that NAFCU sees no reason to expect further easing this year,” said Curt Long, the chief economist at the National Association of Federally-Insured Credit Unions.
Powell is slated to testify on Capitol Hill before the House Financial Services Committee Wednesday and the Senate Banking Committee Thursday, during which he’s expected to shed light on the Fed’s interest rate policy.