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Trump meets Powell to talk about economy on eve of State of the Union

Brian Cheung
President Donald Trump shakes hands with Federal Reserve board member Jerome Powell after announcing him as his nominee for the next chair of the Federal Reserve, in the Rose Garden of the White House in Washington. (AP Photo/Alex Brandon, File)

President Donald Trump invited Federal Reserve Chairman Jerome Powell and Vice Chair Richard Clarida for dinner on Monday, signaling the administration’s focus on the state of the economy ahead of his address to the nation Tuesday night.

In meeting with top Fed officials, Trump has plenty of economic information for his scheduled State of the Union, in which he is already expected to boast of a strong economy — which posted blowout job gains for January.

According to a Federal Reserve press release, Trump invited Powell and Clarida to the White House for an “informal” dinner to chat about recent economic developments and the outlook for growth, employment and inflation. U.S. Treasury Secretary Steven Mnuchin was also in attendance.

The Fed says Powell’s comments were in line with what he said in the January policy setting meeting, where the central bank held rates steady and signaled that it would be taking a pause on its rate hike path.

A face-to-face meeting between Powell and Trump had been discussed some weeks ago, when the president was publicly criticizing the Fed’s gradual path of rate hikes on Twitter. In early January, Trump lamented that “economic numbers” would have looked better if the Fed had kept rates low.

President-Fed chair meeting not a big deal

Powell never said he was closed off to meeting with Trump but was aware of the optics of Fed independence in the face of Trump’s tweets. On the number of occasions he was asked about his relationship with Trump, Powell always made a point of reiterating the Fed’s independence.

As Powell has also pointed out, there is nothing unusual about a Fed chair meeting with the president.

“I can’t think of any Fed chairs who didn’t eventually meet with the president,” Powell said at a conference January 4.

In its readout of the dinner Monday, the Fed said that Powell committed the central bank to its “data-dependent” strategy with monetary policy. The Fed statement also says Powell made it clear that he wants to remain free of influence from the White House and will craft its policy based on “careful, objective and non-political analysis.”

“[Powell] did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the Fed statement read.

Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter @bcheungz.

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