President Trump had a special guest for dinner Monday night: Federal Reserve Chairman Jerome H. Powell, a frequent target of the president’s criticism. Trump has repeatedly called the Fed “crazy” in recent months and accused the central bank of hurting the economy.
Trump and Powell dined on steak for about an hour and a half Monday in the White House residence, according to a person familiar with the meeting. They were joined by Richard Clarida, vice chair of the Fed, and Treasury Secretary Steven Mnuchin, who pushed the president to nominate Powell in late 2017.
The last time Powell and Trump met face-to-face was when Powell interviewed for the job in the fall of 2017.
Powell “did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the Fed said in a statement issued after the dinner. Treasury and the White House did not respond to requests for comment on the evening.
Trump told The Washington Post in late November that he is “not even a little bit happy” that he nominated Powell for the central bank’s top job, but aides have been pushing the president to meet with Powell again. Trump often warms to people after meeting them in person and Powell is well liked on Capitol Hill by both Republicans and Democrats.
Trump has said he believes the Fed is raising interest rates too quickly, harming the stock market and the broader economy. Since Powell took over as Fed chair a year ago, the Fed has raised interest rates four times to a range of 2.25 to 2.5 percent, the highest level in more than a decade, although still low by historical standards.
After the central bank raised interest rates in December, Trump was so irate that he asked close advisers whether he could fire Powell. The Fed is supposed to be independent from politics, and it is hard to remove a Fed governor except for “cause,” which has typically been interpreted by courts as egregious wrongdoing. Top White House officials have come out and said they do not believe the president has the authority to remove Powell, although the president never said he would not try to do it.
Last week the Fed said it would be “patient” about any future rate hikes, a statement widely interpreted on Wall Street to mean that the central bank will not raise interest rates again for several months — and may not raise rates again at all unless the economy outperforms.
Powell vigorously denied that politics played any role in the Fed’s decision-making, saying at a news conference last Wednesday, “We’re never going to take political considerations into account.”
The Fed said that Powell told the president the central bank will continue to set interest rates “based solely on careful, objective and nonpolitical analysis.”
While Trump has tweeted and said publicly that he’s displeased with Powell and the central bank, both the White House and Fed said that the president has not personally asked Powell to take a certain course of action on interest rates.
It is rare for a president to meet with the Fed chair, although not unprecedented. President Barack Obama met with then-Chair Janet L. Yellen in 2016, for example. But presidents are not supposed to dictate Fed policy.
Former Fed chairman Paul Volcker details his awkward encounter at the White House with President Ronald Reagan and his chief of staff Jim Baker in his latest book, “Keeping at It.” Volcker recalls Baker saying, “The president is ordering you not to raise interest rates before the election,” and Volcker “walked out without saying a word.”
Fed leaders believe they must be independent or else faith in the central bank will plummet and the Fed won’t be able to do its job effectively to keep the economy from overheating and regulate banks.
“Paul Volcker is viewed as Moses of central banking for standing up to the president,” said Richard Fisher, the former head of the Dallas Fed.