Mnuchin: Powell and Trump Had 'Productive' Meeting

  • Mnuchin: Powell and Trump Had 'Productive' Meeting

Mnuchin: Powell and Trump Had 'Productive' Meeting

Markets have been mixed in their response to President Trump's combative State of the Union address while investors shift their attention to any signs for the economy from Federal Reserve chair Jerome Powell. The Fed released a statement shortly after the meeting saying that the group discussed the USA economy's performance and outlook, but that Powell did not share his expectations for monetary policy.

Trump and Powell were joined by Treasury Secretary Steven Mnuchin and Federal Reserve Vice Chairman Richard Clarida.

Powell's statements to the president, the Fed said, were all consistent with remarks made at a press conference after the Fed's meeting last week. Since Powell took over as Fed chairman 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.

Powell is actually behind the pace of his predecessors in meeting with the president, even if the "optics" of the session, so close on the heels of a key Fed decision, were not the best. Top White House officials have and said they do not believe the president has the authority to remove Powell, although the president himself never said he would not try to do it.

Former Fed Chair Janet Yellen said in December 2015 that the institution will "proceed cautiously in adjusting policy", while Alan Greenspan said in 1995 that a complex business cycle is underway "whose outcome is yet to be determined", Santoli said.

It's also possible that when it comes to interest rate hikes, the president doesn't have anything to worry about in the year ahead.

Since incidents like the one with Burns, blamed as it was for touching off rampant inflation in the 1970s, presidents have been more wary about trying to intervene on rate policy. He called the Fed's moves to boost rates his biggest threat.

Mnuchin and Powell meet weekly for lunch, a long-held tradition between the heads of the Treasury Department and Fed. "I'm not aware of any Fed chair in my lifetime that hasn't met with the president.And I'm not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate".