Powell pointed out that the United States used to be a global leader in mobility — the ability of people born into poverty to move up to the middle class or even the wealthiest echelons of society. But that is no longer true.
“The U.S. lags now in mobility. And that’s not our self-image as a country, nor is it where we want to be,” he said.
At the Fed, Powell said he is focused on keeping the economy growing and boosting productivity. He said that he didn’t think the Fed could do much to lower inequality, but he called on other policymakers to take action, saying, “We have some work to do to make sure that the prosperity we do achieve is widely spread.”
Powell has had a busy week. He celebrated his 66th birthday Monday by dining at the White House with Trump, Treasury Secretary Steven Mnuchin and Fed Vice Chairman Richard H. Clarida. On Tuesday, a reporter from the Hill spotted Powell walking into the office of Senate Majority Leader Mitch McConnell (R-Ky.). Powell told the teachers that he has spent and will spend most of the week on Capitol Hill meeting with lawmakers.
Sen. Richard J. Durbin (D-Ill.) met with Powell on Thursday and told The Washington Post that the two spoke mainly about the state of the U.S. economy, student loans and the “Durbin amendment,” a part of the Dodd-Frank financial reform bill put in place after the 2008-2009 crisis that requires the Fed to limit the fees that banks can charge retailers for debit card transactions.
Trump has called the Fed “loco” and repeatedly criticized Powell for raising interest rates too fast and harming the economy. Trump blames Powell for the sharp stock market sell-off at the end of 2018 and was so irate in December that he asked close advisers if he could fire Powell.
It’s legally questionable if the president can remove the Fed chair, and it would probably send shock waves through the financial system. Wall Street wants a Fed that’s independent of politics, and the Fed has spent years building its credibility as an independent institution. Durbin said the issue of Trump firing Powell did not come up in their meeting.
Trump has repeatedly urged the Fed not to raise interest rates again. The central bank had planned to raise rates two times this year but reversed course in January and said it would be “patient,” a signal it won’t hike rates anytime soon.
Powell reiterated again Wednesday that politicians, including Trump, do not affect the Fed’s decisions on interest rates or anything else.
“We don’t talk about politics. We don’t bring our politics here. We just do the best we can for the public. It’s enormously rewarding,” he said.
Seung Min Kim contributed to this report.