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WASHINGTON — Federal Reserve Chairman Jerome Powell and Vice Chairman Richard Clarida met with President Trump and Treasury Secretary Steven Mnuchin Monday night, according to a statement from the Fed’s press office.
The Fed said that the four men met at the White House to discuss recent economic developments and the outlook for growth, employment and inflation, but Powell “did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information,” the Fed said.
The president in recentmonths has made a habit of bashing the U.S. central bank over its series of interest rate increases, even going so far as to explore the possibility of firing Powell. Powell has said he would not resign if asked by the president.
The Federal Open Market Committee, a panel of Fed governors and regional Fed bank presidents that sets monetary policy, decided last week to effectively pause its expectations for interest rate hikes because of what Powell described as “crosscurrents” of slowing global growth and muted inflation. The decision led to a flurry of speculation about whether Powell caved to Trump’s pressure or whether the broader FOMC reached the same conclusion about interest rates.
Powell himself was asked during a press conference whether he was responding to pressure from the president, and responded that the Federal Reserve System prizes its independence above all else, and would never take political pressure of any kind into consideration when making its monetary policy decisions.
“What we care about — and really, the only thing we care about at the Fed — is doing our job for the American people,” Powell said. “We’re human, we’re going to make mistakes, but we’re not going to make mistakes of character or integrity.”
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.