Fed Chair Jerome Powell, speaking at the Federal Reserve Board’s International Finance Division 75th Anniversary Conference in Washington, D.C., June 2, did not shed any light on what, if any, decisions may or may not be upcoming regarding the economy and lowering of interest rates, instead focusing on the organization’s previous accomplishments.
“The U.S. emerged from World War II as a global economic superpower,” he said. The Bretton Woods Agreement placed the U.S. and the Fed in a central position in the global economy. Our mission then, as it is now, was to serve the American people, but it was clear at that moment that the Fed needed to have better knowledge of global developments to achieve our dual mandate goals.
“International economics and finance have become increasingly large, complex and significant in recent years. And our foreign economic relations will undoubtedly continue to give rise to issues of the first magnitude.”
He went on to review Fed accomplishments from previous decades. Market investors had been looking for signals on future rate decisions, particularly given potential adjustments under President Trump’s policies and economic uncertainty.
Last week, Powell was at the White House to meet Trump. The meeting’s agenda, according to a statement from Powell’s office, was “to discuss economic developments, including for growth, employment, and inflation.”
“Chair Powell did not discuss his expectations for monetary policy,” the Fed said in a statement after the meeting, “except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.”
White House press secretary Karoline Leavitt added that Trump “did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China and other countries.”
Powell, during a speech in early April, remarked that tariffs would likely trigger higher inflation.
Despite continuous economic uncertainties, consumer spending in the U.S. is still strong. The PCE inflation for April was consistent with forecasts. The 10-year U.S. Treasury yield dropped below 4.5% during the week, but the 30-year yield stayed near 5%.
The next two-day FOMC Meeting is on June 17-18, where the U.S. Fed is likely to keep rates unchanged.
