Fed holds rates steady, bucking Trump pressure

What happened

The Federal Reserve Wednesday voted to keep its benchmark interest rate unchanged at 3.5% to 3.75%, resisting pressure from the White House for further cuts. It was the central bank’s first rate pause since July.

Who said what

“The economy has once again surprised us with its strength,” Fed Chair Jerome Powell said at a news conference. The outlook “has clearly improved since the last meeting,” and while consumer spending is “uneven across income categories,” the “overall numbers are good.” Powell’s comments suggest that Fed officials are “comfortable staying put for some time — until new signs of labor-market weakness emerge or inflation convincingly makes progress toward the Fed’s goal” of 2%, The Wall Street Journal said.

President Donald Trump has “unabashedly tried to bend the Fed to his economic agenda,” threatening its independence, The Guardian said. Powell “largely avoided questions related to politics or the administration during the press conference,” Politico said. But he did call the Supreme Court’s upcoming decision on whether Trump can fire Fed board governor Lisa Cook “perhaps the most important legal case in the Fed’s 113-year history.”

What next?

Powell’s term as Fed chair is up in May. He “has the option of remaining as a Fed governor beyond May but told reporters he hadn’t made a decision about whether to stay or leave,” The Associated Press said. Every Fed chair since the early 1950s has opted to depart after their term, but “Powell’s decision is the last and only card he holds” against Trump’s pressure campaign, the Journal said. Trump is reportedly close to naming the next chair, and when asked Wednesday, Powell offered his successor some advice: “Don’t get pulled into elected politics. Don’t do it.”