Powell walks high wire as Fed plans to ease support for Biden's economy

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Central bank chief seeks to avoid market turmoil as president weighs tapping him for a second term.

Federal Reserve Board Chair Jerome Powell testifies before the Senate Banking, Housing, and Urban Affairs Committee. | Jose Luis Magana/AP PhotoFederal Reserve Chair Jerome Powell on Friday signaled that the central bank may start pulling back some of its historic support for the economy later this year, striking an upbeat tone even as the resurgent coronavirus and labor market troubles loom.

Powell made clear that even if the Fed begins to slow its asset purchases, that doesn’t mean it’s close to raising interest rates, saying there was “much ground to cover” in the labor market recovery. Powell has faced criticism from some progressive groups, who have been vocal in pushing the central bank to not move aggressively to remove support before the benefits of the recovery have been felt more broadly.

But Powell is unlikely to get a furious response as he once did from President Donald Trump. After the Jackson Hole conference in 2019, Trump — frustrated that the Fed was not moving faster to cut interest rates — tweeted: “Who is our bigger enemy, Jay Powell or [Chinese President] Xi [Jinping]?” Ellen Zentner, chief U.S. economist for Morgan Stanley, said Powell’s main job in the speech was not catch investors off guard in any suggestions about how much it will pull back on its bond purchases and how quickly.

 

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Sounds like all he has to do is tell everyone that we are not really in a bad place. But we all see the inflation. Glad to know next year when we are all in a food line, he will still have a job..

You all were bought by a German right wing media group. So, ethically, we should tune out Politico, same as Fox and Sinclair.

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