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Final press conference... "Won't be a shadow chairman, just an ordinary board member"
Maintaining cautious policy stance amid rate freeze... "U.S. economy quite resilient"
U.S. Federal Reserve (Fed) Chairman Jerome Powell held his final press conference as chairman on the 29th (local time) and stated that he would remain on the board for the time being after his term ends.
Chairman Powell made this statement at a press conference held after the Federal Open Market Committee (FOMC) froze the benchmark interest rate at 3.50-3.75% today.
He said, "Even after my term as chairman ends on May 15, I will continue to serve as a board member for a period of time," adding, "I plan to carry out my duties as a board member with a low profile."
Regarding the U.S. Department of Justice investigation into alleged excessive spending on renovations at the Fed building, which involved him, Chairman Powell said, "I have stated that I would not leave the board until this investigation is transparently, finally, and completely concluded, and I am maintaining that stance."
He mentioned recently being notified by the Department of Justice that the investigation had concluded, adding, "I view the recent developments as encouraging and am carefully watching the upcoming procedures."
Regarding his decision to remain at the Fed, Chairman Powell said, "My concern is a series of legal attacks being made against the Fed," adding, "This threatens our ability to conduct monetary policy without political considerations."
He emphasized, "I want to make it clear that this is unrelated to verbal criticisms from elected officials."
Chairman Powell repeatedly criticized the recent legal pressure against the Fed.
He said, "I am concerned that these attacks are battering the Fed and endangering our ability to conduct monetary policy without considering political factors, which are important to the public."
He then stated, "As for when I will leave, I will leave when I deem it appropriate."
Regarding criticisms that "remaining on the board is a political act," he flatly stated, "I don't think so at all. The reason I am staying is because of the actions taken so far."
Regarding his 'low profile' role, he said, "I will absolutely not play a 'shadow chairman' role," adding, "I will return to being an ordinary board member."
Regarding the Fed's independence, he assessed, "I believe it is at risk."
He said, "I am confident that the Fed will make decisions in the future based on thorough and rigorous analysis, not political considerations," adding, "But we had to fight to protect it."
Chairman Powell extended congratulations to Kevin Warsh, the nominee for the next chairman, whose confirmation was approved by the Senate Banking Committee today. When asked if he believed Warsh would handle political pressure well, Powell replied, "He testified very strongly on this during the hearing. I believe his words."
Regarding monetary policy, he reaffirmed a cautious stance.
Regarding the inflation outlook, Chairman Powell said, "It's difficult to comment on energy prices," adding that while there's usually no need to react immediately to energy shocks, a more cautious approach is needed now as inflation has been above target for several years.
He stated that he believes energy prices have not yet peaked and that he would confirm a slowdown in price increases and progress in tariff-related uncertainties before considering interest rate cuts.
He said, "No committee member argued for an immediate rate hike," adding, "Everyone supported this rate decision."
He also reported that there was a much more intense discussion this time regarding a change in policy stance.
Chairman Powell stated that "the policy rate is already at a sufficiently high level" and that he would observe the situation rather than rushing additional hikes or cuts. He assessed the current interest rate level as "quite close" to the neutral rate.
Regarding the Iran war, he warned that while the U.S. would be less affected than Europe and Asia due to its status as an energy exporter, the impact would be greater if the situation prolongs.
He assessed the overall U.S. economy, excluding inflation, as "quite resilient."
He explained that consumer spending is robust, business investment, such as data center construction, is expanding, and the unemployment rate (4.3%) is low. However, he noted the limited growth in new jobs, diagnosing it as an "unusual and uncomfortable state of equilibrium."
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