Federal Reserve Chair Jerome Powell said Wednesday that he was “not concerned” the US central bank would lose its independence, despite President-elect Donald Trump’s suggestion that he should have input into interest rate decisions.
“I’m not concerned that there’s some risk that we would lose our statutory independence, because I do think that those set of ideas are strongly believed by people,” Powell said, speaking at The New York Times’ DealBook Summit.
Trump has said he would like “at least” a say over setting the Fed’s interest rate, although this runs against the bank’s mandate to act independently of Congress and the White House in tackling inflation and unemployment.
On Wednesday, Powell also shrugged off a suggestion by Trump’s Treasury secretary nominee Scott Bessent of choosing a shadow Fed chair that would dilute his influence.
“I don’t think that’s on the table at all,” Powell said.
He added that he expects to have the same general types of institutional relationships with the incoming administration as before — including with the Council of Economic Advisers and Treasury Department.
Powell also noted that the US economy remains strong, adding that the central bank “can afford to be a little more cautious” as it looks to lower interest rates.
But policymakers will base their decisions about what is happening in the economy now, rather than uncertain factors such as potential tariffs — which President-elect Trump has threatened on trading partners.
On the US federal budget, Powell said he believed it was on an “unsustainable path” even if debt was not at an unsustainable level.
“We know that we have to change that,” he said, adding that this has to be done “sooner, better than later.”
He also said he did not see Bitcoin as a competitor to the dollar.
The next Fed policy meeting is set to be held on December 17 and 18.