WASHINGTON: A top Federal Reserve official said Wednesday the US central bank has stayed independent of political interference and insisted it would remain so.
“The independence of the Fed is critical for everything we do, and you know there are things that are going on that make people worried, but I still believe that we have an independent Fed,” Fed governor Christopher Waller told CNBC.
Appointees to the Fed will “act in an unpolitical fashion,” Waller said. “So I think no matter what, the Fed will maintain its independence.”
Waller was nominated by Donald Trump in the president’s first term and has been mentioned as a possible successor when Chair Jerome Powell’s term ends next spring.
Since returning to the White House in January, Trump has relentlessly pushed for interest rate cuts, regularly lambasting Powell on social media.
Fed’s credibility is an asset whose decline could be costly
Waller was one of two Fed officials to dissent from the Fed’s July decision to keep interest rates unchanged. The other dissenter, Michelle Bowman, was also appointed by Trump.
Waller declined to comment on Trump’s attempt to fire fellow Fed governor Lisa Cook, who was appointed by Joe Biden. Trump has alleged Cook committed mortgage fraud, assertions Cook’s attorney has dismissed as a smear campaign.
The matter is now being litigated in a US court.
Waller said Wednesday he backed an interest rate cut later this month, reiterating that he views the weakening job market as the prime concern right now and that inflation from Trump’s tariffs would be short-lived.
Waller predicted the economy would weaken, but he does not expect a recession.
“I do see slower growth through the year, mainly because of the tariff impacts,” Waller said. “I mean, tariffs are a tax and taxes are never typically good for growth.”
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