WASHINGTON -- President Donald Trump summoned Federal Reserve Chairman Jerome Powell to the White House on Monday for a meeting about the economy only a few weeks after labeling Powell a "bonehead," a "terrible communicator" and an "enemy."
The Fed released a statement Monday morning saying the meeting occurred "at the president's invitation" and that Powell told Trump the Fed will continue to set interest rates "based solely on careful, objective and non-political analysis."
Powell's comments "were consistent with his remarks at his congressional hearings last week," the statement said.
The meeting was in the White House residence, not the Oval Office, a White House official said. Treasury Secretary Steven Mnuchin was also present.
"Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve," Trump tweeted Monday. "Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc."
The president's statement appears to contradict the Fed's, which said Powell did not talk about whether the Fed is likely to raise or lower the benchmark interest rate in the future. The Fed reduced the U.S. interest rate to just shy of 1.75% last month -- the third cut this year.
Trump has repeatedly bashed the Fed and pressed it to lower rates further, even suggesting that the United States should have negative interest rates like Japan and much of Europe, a scenario that typically happens only when the economy is in a dire place. Powell told Congress last week that negative rates are "certainly not" appropriate.
The dollar dropped to a session low amid gains in the euro after the news hit that negative interest rates had been among their topics of conversation.
The Fed's relatively high benchmark rate, compared with the negative rates overseas, probably does keep the dollar at a higher value compared with the euro and yen. That, in turn, can make U.S. exports more expensive overseas.
Still, the vast majority of mainstream economists oppose the notion of deploying negative rates for the U.S. economy, which is healthier and is growing faster than its European and Japanese counterparts.
Negative rates are typically a sign that an economy is struggling. Many U.S. economists have expressed skepticism that negative rates help accelerate growth and argue that they would cause problems unique to the U.S. financial markets.
Far more Americans, for example, stash savings in money-market funds than savers overseas. Those funds seek to keep their shares equal to $1. Negative rates could cause more of those funds to fall below $1, or "break the buck," which last occurred during the financial crisis a decade ago and fueled panic among investors.
Trump nominated Powell for the top Fed post in 2017, but the president quickly soured on him. Trump has spent the past year saying Powell was harming the economy by keeping interest rates too high. But most economists and business leaders say the real drag on the economy this year has been Trump's unpredictable trade war.
"I don't see evidence of political pressure having any impact on Powell," said Kathy Bostjancic, an economist at Oxford Economics.
Powell regularly meets with members of Congress from both parties. During two hearings last week, lawmakers sounded largely supportive and respectful of the Fed's independence.
With less than a year until the 2020 election, the world's largest economy has been generally holding up this year on resilient consumption. Gross domestic product increased at a 1.9% annualized rate in the third quarter, though that was down from 2% in the second quarter and 3.1% in the opening three months of the year.
Powell had dinner with Trump in February and the two have spoken since by telephone. Meetings between a president and Fed chief are rare but not unprecedented.
Powell last week called the U.S. economy a "star" performer and voiced solid confidence that its record expansion will stay on track.
In addition to public scolding of Powell, the president also has the opportunity to pick people for the Fed's policy-setting committee. He chose four of the five current members of the Fed's Board of Governors in Washington and two vacancies remain open.
However, despite announcing his intention to nominate several people for those jobs -- most recently in July when he named Trump supporter Judy Shelton and St. Louis Fed research chief Christopher Waller -- Trump has yet to actually nominate either.
Information for this article was contributed by Heather Long and Seung Min Kim of The Washington Post, by Christopher Rugaber and Martin Crutsinger of The Associated Press and by Jeff Kearns and Alister Bull of Bloomberg News.
Business on 11/19/2019