Fed Powell pushes back on political pressure narrative

Fed Chair Jerome Powell said in the post meeting press conference that the US economy expanded at a solid pace last year and is entering 2026 on “firm footing”. He added that monetary policy is “not on a preset course”, reiterating that future rate adjustments will depend on incoming data, the evolving outlook, and the balance of risks. He said the Fed is “well positioned” to determine the extent and timing of any additional moves, emphasizing a meeting-by-meeting approach rather than signaling near-term action.

The press conference turned more pointed when Powell was asked about the implications for American households if the Fed were to lose its independence. He argued that independence is not about protecting policymakers, but about safeguarding credibility, noting that every advanced democracy has converged on the practice of insulating monetary policy from direct political control.

Powell warned that losing independence would make it difficult to restore institutional credibility, stressing that central banks serve the public best when allowed to operate free from political interference. He said he remains confident that the Fed can maintain that independence, adding that both he and his colleagues are firmly committed to preserving it.