Since returning to power last year, President Donald Trump has frequently slammed Powell for not cutting interest rates more quickly, a policy that would boost economic activity but could fuel inflation.<\/p>\n
Trump separately attempted to oust Fed governor Lisa Cook over mortgage fraud allegations, in a case that now stands before the Supreme Court.<\/p>\n
Trump\u2019s Justice Department, meanwhile, opened a criminal probe into Powell and the Fed over renovation cost overruns, a move the central banker called a tactic to erode the Fed\u2019s independence.<\/p>\n
The Justice Department has dropped that investigation into Powell for now, and the Fed chief said he was encouraged by recent developments.<\/p>\n
He added that he is monitoring the next steps in this process, reiterating that he would not leave the Fed until the probe is \u201cwell and truly over\u201d.<\/p>\n
Powell also emphasised the need for a central bank that operates \u201cfree of political influence\u201d.<\/p>\n
On Wednesday, the Fed chairman congratulated his expected successor, Kevin Warsh, for clearing a key hurdle in a rocky confirmation process.<\/p>\n
Unusually divided<\/p>\n
Powell\u2019s remarks came shortly after an unusually divided Fed kept interest rates unchanged for a third straight meeting on high uncertainty from the Middle East war.<\/p>\n
\u201cInflation is elevated, in part reflecting the recent increase in global energy prices,\u201d the central bank said in a statement.<\/p>\n
Its decision keeps rates at a range between 3.50% and 3.75%.<\/p>\n
But four out of 12 voting officials opposed the outcome, including Governor Stephen Miran, who sought a quarter-point cut.<\/p>\n
Three Fed presidents \u2013 Beth Hammack, Neel Kashkari and Lorie Logan \u2013 backed the pause but not the Fed statement signalling an inclination toward interest rate cuts.<\/p>\n
This was the largest number of dissenting votes since 1992, and the divergence among officials will be closely watched with the central bank set to enter a new era.<\/p>\n
The Fed has been on a path of rate cuts since late last year.<\/p>\n
But with the US-Israel war on Iran causing a surge in energy costs and snarling supply chains, analysts are monitoring whether inflation could prompt policymakers to consider instead the need for a rate hike.<\/p>\n
Powell told Wednesday\u2019s press briefing that he expects Warsh to have the skills to forge consensus among the Fed\u2019s voting members.<\/p>\n
\u2018Persistent threats\u2019<\/p>\n
The Senate Banking Committee voted 13-11 to advance Warsh\u2019s nomination earlier on Wednesday, bringing him closer to confirmation by the full Senate.<\/p>\n
But Democrats on the Senate panel pushed back against the process, with Senator Elizabeth Warren charging that this would further the President\u2019s \u201cattempt to seize control of the Fed\u201d.<\/p>\n
Georgia Senator Raphael Warnock warned that Warsh\u2019s nomination had been \u201ctainted by the real and persistent threats\u201d Trump made to Fed governors, stressing the need for the bank\u2019s independence.<\/p>\n
Republican Senator Thom Tillis on the banking panel initially vowed to block Warsh\u2019s nomination if the investigation was not concluded.<\/p>\n
But with the Justice Department saying that it is dropping the probe, Tillis relented and backed Warsh in Wednesday\u2019s vote.<\/p>\n
On whether he believes Warsh would stand up to Trump, Powell said: \u201cHe testified very strongly to that effect in his hearing, and I\u2019ll take him at his word.\u201d<\/p>\n
\u2013 Agence France-Presse<\/p>\n","protected":false},"excerpt":{"rendered":"Since returning to power last year, President Donald Trump has frequently slammed Powell for not cutting interest rates…\n","protected":false},"author":2,"featured_media":405071,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2438,74,806,1643,34595,127340,138,3013,1853,9084,3937,4726,2829,14051,25807,21556,8790,25621,6712,111,139,69,90,3111,2171,25622,21411,10665,312,2069,1335,1361,61,2179,8238],"class_list":["post-405070","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-administration","tag-after","tag-as","tag-bank","tag-battles","tag-bow","tag-business","tag-but","tag-central","tag-challenges","tag-chief","tag-ends","tag-fed","tag-federal","tag-governor","tag-independent","tag-institution","tag-jerome","tag-legal","tag-new-zealand","tag-newzealand","tag-nz","tag-on","tag-out","tag-plans","tag-powell","tag-pressure","tag-reserve","tag-says","tag-stay","tag-term","tag-that","tag-to","tag-trump","tag-under"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/405070","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=405070"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/405070\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/405071"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=405070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=405070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=405070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}