The Federal Reserve went against President Trump's wishes to cut interest rates at its May FOMC meeting last week. In a social media post on Tuesday, Trump demanded that the central bank lower rates, citing declines in energy and grocery prices.
Despite being hard-pressed by the Trump administration, the Fed and Chair Jerome Powell are still finding support from GOP lawmakers.
Yahoo Finance senior reporter Jennifer Schonberger sat down with US Representative Frank Lucas (R-Ok.) — who is the new chair of the House's Monetary Policy Task Force — to talk about Powell's "exceptional job" at the helm of the Fed during an "exceptionally difficult time to be there."
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President Trump resuming criticism of Fed chair J. Powell this afternoon, posting on Truth Social that the Fed must lower rates. And our very own Jennifer Schonberger spoke with Republican Congressman Frank Lucas earlier today about the Fed, its structure and whether he supports Powell, Jen.
Good afternoon, Josh. Republican Congressman Frank Lucas, the new chair of the monetary policy task force in the house, told me in an interview earlier today that he still supports Jerome Powell as chairman of the Federal Reserve. Even as President Trump, once again today, criticizing Powell for being too late to lower rates.
Yes, I think under the circumstances he's done an exceptional job and he's had an exceptional difficult time to be there. Maybe the most complicated since the 1930s. I also think he'll finish out his term at the next year which is something he's expressed and we'll see who President Trump nominates at that point.
Lucas is leading the house's efforts to review whether the Fed should focus more exclusively on fighting inflation amid a broad review of the central bank. When it comes to the structure of the Fed, Lucas said the fundamental nature of the Federal Reserve Act of 1913 is quote solid. Instead, he says the question becomes whether the Fed's dual mandate for maintaining stable prices and full employment is still relevant.
From my personal point of view, I suspect that while there may be discussion about the employment mandate, it's hard to believe that anything will change. And while my Democratic colleagues will want to expand into other areas, as they've tried since Dodd-Frank, I don't think my Republican colleagues will be accepting of that. So, don't expect a dramatic amount of change, I would guess at this stage. But this is early in the process. And remember, we're still working with Chairman Hill and the full committee.
Lucas's task force is set to hold a hearing this Thursday on the recent volatility in the Treasury market. He says the goal there is to explore why there has been such sudden sell-offs in Treasuries and what can be done to mitigate that volatility. Lucas telling me that our Treasury markets should be calm, deep, liquid, and boring. Back to you.
Yes, I think that's a good goal. For many people want to come.
Yes, I think we would all like a boring Treasury market, right, truly?
Jen, thank you.
