Jay Powell reportedly ramps up meetings with lawmakers as he seeks to protect Fed's independence
- President Trump broke historical precedent by criticizing the Fed’s decision to raise interest rates —in the meantime, Central Bank Chairman Jay Powell is reportedly meeting with members of Congress.
- Powell has met or called with lawmakers 48 times in his first six months in office while his predecessor Janet Yellen by comparison had only 17 contacts with lawmakers, according to a report from Bloomberg News.
- On Capitol Hill and Wall Street, the president's remarks have been taken as an affront on the bank's independence from political pressure.
Fed Chairman Jerome Powell has reportedly been making the rounds on Capitol Hill amidst criticism from President Trump that could threaten the central bank's independence.
The same day that the president criticized Powell in a CNBC interview, the central bank chair was stopping by the offices of Democrats Senator Ron Wyden of Oregon, and Representative Michael Capuano of Massachusetts, according to a report from Bloomberg News Thursday.
Days earlier, Powell had told radio show "Marketplace" that he was going to "wear the carpets of Capitol Hill" by walking the halls and meeting with members." Making allies in Congress could be seen as a way to protect the Fed's freedom when it comes to monetary policy.
Powell has met or called with lawmakers 48 times in his first six months in office — 21 of those were with Democrats, and 27 with Republicans, according to Bloomberg. His predecessor Janet Yellen by comparison had only 17 contacts with lawmakers. Thirteen of those were with Democrats.
The central bank chief has also ordered his congressional-liaison staff to double down on efforts to reach out to both Democrats and Republicans, according to the report. Fellow board member Lael Brainard, a Democrat, recently met Republicans from the House Financial Services Committee, which oversees the Fed.
Trump's criticism of Powell is historically rare, and was taken by many on Capitol Hill and Wall Street as an affront on the bank's independence from political pressure. The president told CNBC he's "not thrilled" with the rate hikes, and reportedly told donors at a fundraiser this summer that Powell had not been the "cheap money" banker he hoped for. On Capitol Hill and Wall Street, those remarks were taken as an affront on the bank's independence from political pressure.
Powell has said he believes the economy is strong enough for the Fed to continue on its path of normalizing rates. The Fed increased rates to a target range of 1.75 to 2 percent in June, and according to projections has two more increases planned for this year.
A massive tax cut ushered through by Republicans last year slashed the corporate rate from 35 percent to 21 percent and lowered marginal rates across the board. The move has added record stock market gains and boosted the economy to grow nearly 3 percent in 2018, above its post-recession rate before he took office.
Read the entire Bloomberg report here.
— CNBC's Jeff Cox contributed reporting.