Washington (AP)-The chairman of the Federal Reserve Jerome Powell defended the reaction of the Central Bank to the COVID-19 Pandemic Sunday in a speech from Princeton University in which he also praised government employees and American universities, both of which are aimed by the Trump government.
Powell and the Central Bank have been subject to extensive criticism in recent weeks by President Donald Trump and a potential successor, former Fed Governor Kevin Warssh.
Powell spoke with a baccalaureate service prior to the start of Tuesday, which noticed that he graduated from Princeton 50 years ago, specifically the decision of the Central Bank to reduce its main interest rate to almost zero in response to the pandemic. It also launched an asset purchase program in which trillions of dollars from treasury bonds and mortgage-covered effects include, intended to keep interest rates low in the longer term.
“With little warning, economies all over the world came to a halt,” Powell said, referring to the pandemic. “The possibility of a long, serious, global depression stared at us in the face. Everyone turned to the government, and in particular the Federal Reserve as an important first response.”
Powell has also chosen old government employees for praise: “Career officials at the Fed who are veterans of earlier crises stepped forward and said,” We have this, “he said.
Trump has subjected Powell to a power strikes for a few months because the FED has kept its most important rate unchanged this year, after having cut it three times at the end of 2024. Trump has said that there is “no inflation”, so the Fed should lower the loan costs.
Earlier this month, Trump called Powell a 'fool' for not beating rates and last week called the FED chairman 'too late Powell'.
Powell did not respond to the attacks of Trump, who previously won him support among Republicans on Capitol Hill.
In his Sunday speech, he defended American universities, who came under sharp attacks of the Trump administration, because research grants and other financing were cut for various Ivy League universities, including Princeton.
“Our large universities are the envy of the world and a crucial national assets,” said Powell. 'Look around you. I urge you not to consider this obvious. “
At the end of last month, Warssh, who served as one of the Governors of the FED, hit the central bank for the peak of inflation to the highest level in four decades in 2022. Warssh is considered a leading candidate to become the next FED chair when Powell's term ends in May 2026.
“Every time the FED jumps into action, the more he expands its size and scope,” Warssh said in a speech on the sidelines of the spring meetings of the International Monetary Fund. “More debts are collected … More institutional lines are crossed and the Fed is forced to act even more aggressively next time.”
The Fed does not issue any debts, but Warssh and other FED critics claim that the purchase of treasury bonds enabled the federal government to borrow and publish more.
Powell has acknowledged that the FED could have moved faster to increase interest rates as soon as inflation began to rise in 2021. Yet on Sunday he defended the Pandemic File of the Fed.
“The joint efforts of many have avoided the worst results,” said Powell. “It is difficult to imagine that the pressure with which people are confronted at such a moment. Their collective efforts have saved our economy, and the career officers involved deserve our respect and gratitude; it is my great honor to serve next to them.”
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This story has been corrected to show that Powell spoke at a baccalaureate service in Princeton, not at the start, which is planned for Tuesday.
