Federal Reserve Chief Jerome Powell Doubles Down on Failed Policy

May 14, 2020 (EIRNS)—In prepared remarks for a webcast May 13 at the Peterson Institute for International Economics, Federal Reserve System Chairman Jerome Powell stated: “The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II.” He patted his own back, however, pronouncing that the Fed’s actions to date have been “both timely and appropriately large,” and stating that “it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks.” He told people to expect more of the same hyperinflationary QE: “We’ve said that we continue to rely on those tools that are tried, and they are now a part of our toolkit.”

Powell said that the Fed was not going to implement negative interest rates at this point, despite the pressure to do so from President Donald Trump and others. “I know there are fans of the policy,” Powell said. But “this is not something that we’re looking at.” He argued that negative rates would likely hurt the banking industry, and he sure doesn’t want to do that.

In remarks at the White House on May 13, Trump said Powell is doing better than before, but he still disagrees on negative interest rates. “I feel strongly we should have negative rates,” Trump told reporters. “The chairman—he’s my MIP over the last few months. He’s done a very good job.” Trump explained that he meant “Most Improved Player.”