Powell defends the Federal Reserve's actions in a speech at Princeton, facing criticism from Trump's persistent assaults
In a speech at Princeton University, Federal Reserve Chair Jerome Powell defended the central bank's response to the COVID-19 pandemic, praising government employees and U.S. universities amid criticism from President Donald Trump and potential successor, Kevin Warsh.
Powell pointed out the critical role the Fed played during the pandemic, stating that the possibility of a severe global depression was imminent. He commended the efforts of career civil servants who stepped up to address the crisis, asserting that their actions saved the economy.
Trump had previously criticized Powell for keeping the key interest rate unchanged this year, despite calling for lower borrowing costs. The President has been vocal about his disapproval of the Fed's policies, even going as far as to call Powell names like "Too Late Powell" and "fool." In contrast, Powell has chosen not to respond to these attacks.
During the speech, Powell also lauded American universities, which have faced funding cuts from the Trump administration. He acknowledged the value of these institutions, emphasizing that they are an invaluable national asset.
Warsh, a former Fed governor, criticized the central bank for allowing inflation to spike to its highest level in four decades in 2022. He is considered a leading candidate to become the next Fed chair when Powell's term ends in May 2026. Critics argue that the Fed's purchase of Treasury bonds enables the federal government to borrow and spend more, a criticism echoed by Warsh.
However, Powell has acknowledged that the Fed could have moved quicker to raise interest rates once inflation began to rise in 2021. Nevertheless, he remains confident in the Fed's ability to manage the economy effectively, assessing that through collective efforts, the country avoided the worst outcomes during the pandemic.
This story was corrected to show that Powell spoke at a baccalaureate service at Princeton, not the commencement, which is planned for Tuesday.
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- The Federal Reserve Chair, Jerome Powell, in a speech at Princeton University, defended the central bank's policy-and-legislation regarding the COVID-19 pandemic, praising the efforts of government employees and American universities, despite criticism from President Donald Trump and potential successor Kevin Warsh.
- Powell commended the career civil servants who stepped up to address the crisis, stating that their actions saved the economy, while American universities, which have faced funding cuts from the Trump administration, were acknowledged as an invaluable national asset.
- In contrast, Warsh, a former Fed governor, criticized the central bank for allowing inflation to spike to its highest level in four decades in 2022, a criticism echoed by those who argue that the Fed's purchase of Treasury bonds enables the federal government to borrow and spend more.
- Meanwhile, in other general-news,Microsoft layoffs have primarily affected developers, product managers, and morale, and the proposed Seattle earplug law draws mixed reactions, labeled as "tone-deaf."
