Federal Reserve Chairman Jerome Powell asserted the central bank’s independence in remarks to Democratic lawmakers, telling them the Fed doesn’t consider political pressure in any way, according to two people in the room for the closed-door event.
Powell’s appearance Thursday night at a Democratic retreat in Leesburg, Virginia, came as many of the lawmakers gathered there have raised alarms about the Fed’s independence in the face of President Donald Trump’s frequent criticisms of the central bank.
Powell declined to discuss the president, according to the people, a comment that was greeted by applause. The chairman told the lawmakers that interest rates are at about the right level given current economic conditions and that the benefits of U.S. economic growth haven’t been as widely spread as the Fed would like.
He was interviewed on stage by Ohio Representative Joyce Beatty for a discussion on the economy with no news media in the room. The people in the session provided descriptions of Powell’s remarks on the condition of anonymity.
When asked about the potential nominations of businessman Herman Cain and conservative activist Stephen Moore to the Federal Reserve Board, Powell said he doesn’t discuss Fed nominations.
While the chairman declined to comment on several aspects of fiscal policy, he did endorse the Earned Income Tax Credit as a way to distribute wealth more widely.
He also discussed the danger of a growing budget deficit by saying the U.S. does not have unlimited resources. He said that increasing deficits are an unsustainable path, but the worldwide hunger for Treasuries means no short-term market implications.
Asked by House Majority Leader Steny Hoyer of Maryland about the danger of a debt ceiling default, Powell urged that the ceiling be increased and called a default unthinkable, according to the people in the room.
Powell also discussed Fed forecasting, saying the slowdown in Europe had caught it by surprise.
Michelle Smith, a Federal Reserve spokeswoman, declined to comment on Powell’s session with the lawmakers.