Powell Refuses to Quit | "I Will Continue To Serve" Despite Trump Attacks | Fed Pauses Rate | N18G

Added: 2026-05-07

[00:00:00]Good afternoon.

[00:00:01]It's it's a it's it's it's a good question, right? You see inflation has moved up.

[00:00:06]Today, the FOMC decided to leave our policy rate unchanged.

[00:00:11]We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2% inflation goals.

[00:00:20]Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook.

[00:00:25]And we will remain attentive to risks to both sides of our dual mandate. stuff.

[00:00:31]Is there any sense that interest rates might have to go up or was this just a setup to sort of warn Inflation has moved up recently and is elevated relative to our 2% longer run goal.

[00:00:46]Estimates based on the consumer price index and other data indicate that total PCE prices rose 3.5% over the 12 months ending in March.

[00:00:55]Boosted by the significant rise in global oil prices that has resulted from the conflict in the Middle East.

[00:01:02]Excluding the volatile food and energy categories, core PCE prices rose 3.2% over the 12 months ending in March.

[00:01:10]This relatively high rate largely reflects the effects of tariffs on prices in the goods sector.

[00:01:16]Near-term measures of inflation expectations have risen this year, likely because of the substantial rise in oil prices.

[00:01:24]And I think that's that's the way it's always worked there cuz the chair only has one vote plus the ability to develop consensus. And if people won't be, you know, they they I welcomed the announcement [clears throat] last Friday by the US attorney for the district of Columbia that she had closed the criminal investigation. She also noted, however, that she would not hesitate to restart the investigation.

[00:01:45]Over the weekend, the Department of Justice provided assurances that they will not reopen the investigation unless there's a criminal referral from the Fed's Inspector General. And absent such a referral, if they do appeal the recent court decision, they would not seek, as part of that appeal, to restart the investigation or send new subpoenas.

[00:02:07]>> [clears throat] >> I've said that I will not leave the board until this investigation is well and truly over with transparency and finality, and I stand by that. I'm encouraged by recent developments and I'm watching the remaining steps in this process carefully.

[00:02:23]My decisions on these matters will continue to be guided entirely by what I believe is in the best interest of the institution and the people we serve.

[00:02:31]After my term as chair ends on May 15, I will continue to serve as a governor for a period of time to be determined.

[00:02:39]I plan to keep a low profile as a governor.

[00:02:41]There's only ever one chair [clears throat] of the Federal Reserve Board. When Kevin Warsh is confirmed and sworn in, he will be that chair.

[00:02:49]Once sworn in as board chair, his new colleagues will elect him to chair the FOMC as well.

[00:02:56]What would be your best best guesses to whether the easing bias will still be in the statement? Thank you. But these legal actions by the administration are unprecedented in our 113-year history, and there are ongoing threats of additional such actions. I I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors. It is so important for our economy, for the people that we serve, that they can depend over time on a central bank that operates that way, free of political influence. It's part of the absolute foundation of this amazing economy that we have. It's just one of the many reasons why the US economy is the envy of the world.

[00:03:42]I'm waiting, you know, for the for the investigation to be well and truly over with finality and transparency.

[00:03:49]And I'm waiting for that.

[00:03:51]And I will leave when I think it's appropriate to do so.

[00:03:56]really do as much on on that as we might have.

[00:04:00]And uh you know, I was never the world's biggest fan of the dot plot, but you you can't can't beat something with nothing.

[00:04:05]And you know, there's a You know, where we're at is we think our really we think our policy rate is in a good place.

[00:04:12]Um if we need to hike, we will we will certainly signal that and we will and we will certainly do it. And if we need to to cut, then if it's appropriate to cut, then we'll we'll signal the opposite. I think we because we feel like we're we're in a good place to move in either direction. Um nobody's calling for a hike right now.

[00:04:32]Um so, it really is going to depend on how things how things evolve.

[00:04:37]unusual and uncomfortable kind of a balance where people who don't have jobs will have a hard time breaking in unless somebody quits their job.

[00:04:44]And if you look at the unemployment rate, it's 4.3%, so that's a low rate.

[00:04:48]That's pretty close to mainstream estimates of the natural rate. We've been there for a long time. So, it's it's it doesn't feel like a good labor market to some who who don't have jobs because quits are really low, hires are really low, and there's effectively no new net job creation. So, that's a that's you know, in a sense, the labor market is in balance, but it's an unusual and uncomfortable kind of a balance where people who don't have jobs will have a hard time breaking in unless somebody quits their job.

[00:05:19]How would you characterize um what you've heard from your colleagues on your decision to stay? Um do you have their support?

[00:05:27]This institution is resilient, capable, and staffed by professionals of extraordinary talent and exceptional dedication.

[00:05:35]It has been a privilege to serve alongside so many great public servants at the Board of Governors and around the Federal Reserve System.

[00:05:43]We know, we're very well aware that people are experiencing higher gas prices all over the country now, and that hurts. [clears throat] That's And these are those those hikes may continue to happen. I and other other things are going to start to reflect air-airline fares I mentioned and and other other products and services that are dependent upon petroleum and derivatives of petroleum. People are going to start to feel that.

[00:06:06]And when it comes to gas, right now it's over $4 a gallon. Inflation just hit a two-year high. Should Americans expect to be paying higher gas prices for the rest of this year?

[00:06:16]>> As one of your colleagues said, uh the economy has been resilient. It really has. Not just this time, but it's been remarkably resilient for some years now.

[00:06:25]The US economy has just powered through shock after shock. And consumers are still spending, and that's what that's what the banks will tell you, credit card companies will tell you, the retail sales numbers that we got most recently.

[00:06:36]People are still spending. And um you know, how long can that go on in a world where if gas prices were to go up a bunch more, that's taking otherwise spendable money out of people's pockets.

[00:06:47]But right now we we don't actually see much slowdown in yet from certainly none from from this. But you think logically you will because people have a certain amount of money they spend. If they're spending 25% more on gas or something like that, then you know, that's going to come out of other spending. But we again, we don't see it yet.

[00:07:05]Anyway, thank you very much, everyone.

[00:07:10]I won't see you next time.