Powell says he won't resign as lawmakers defend independent Fed

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Federal Reserve independence moved front and center in Congress Wednesday as Chairman Jerome Powell said he wouldn’t stand down from his job if President Trump attempted to fire him.

House Financial Services Committee Chair Maxine Waters opened a semiannual hearing on monetary policy by saying that central bank independence was the “elephant in the room’’ and added that “it is essential that the Federal Reserve maintains its independence from the executive branch.’’

Waters, a California Democrat, asked Powell directly: “If you got a call from the president today or tomorrow, and he said, ‘I am firing you, pack up, it’s time to go,’ what would you do?’’

“Of course, I would not do that,’’ Powell said.

“I can’t hear you,’’ Waters joked, causing laughter throughout the hearing room.

“My answer would be no,’’ Powell reiterated.

The exchange comes amid unprecedented attacks and attempted influence on monetary policy by Trump, who has criticized both Powell and the central bank’s policy decisions.

The president has also tried to appoint several loyalists to the Board of Governors. Two past picks were panned by congressional members and failed to advance. Last week, Trump said he will appoint Judy Shelton to the Board of Governors. Shelton said after the announcement that “this president really gets it" and that she “will strive to support the U.S. pro-growth economic agenda with the appropriate monetary policy.”

Sen. Sherrod Brown of Ohio, the ranking Democrat on the Senate Banking Committee, called Shelton “singularly unqualified” in comments to reporters Tuesday.

Trump also named St. Louis Fed research director Christopher Waller for one of the two open seats on the board. Waller works for St. Louis Fed President James Bullard, who dissented at the June meeting in favor of a quarter-point rate cut. Brown said he wants to meet with Waller, who “appears to be pretty good,” he said.

Waters’ comments were followed by Patrick McHenry, the ranking Republican on the committee from North Carolina, who asked Powell if policy was “impeded’’ by people saying positive or negative things about the central bank. Powell said it was not.

Lawmakers from both parties are becoming more vocal in their defense of Fed independence. Powell embraced the central bank’s independence in his opening testimony Wednesday, noting that it comes with a need for transparency and accountability.

Sen. Patrick Toomey, a member of the Senate Banking Committee where Powell will testify Thursday, said any attempt by the president to fire Powell “would be a very, very bad idea.’’

“I don’t think the president actually does have the legal authority to do that,’’ Toomey, a Pennsylvania Republican, said in an interview with Bloomberg Television’s David Westin.

Bloomberg News