Federal Reserve Chair Jerome Powell defended the central bank’s response to the COVID-19 pandemic in a speech at Princeton University, where he also praised government employees and US universities under attack from the Trump administration.
Powell noted that with little warning, economies around the world came to a hard stop due to the pandemic. The Fed cut its key interest rate to nearly zero and launched an asset-purchase program to keep longer-term interest rates low. Powell defended this decision, saying it helped avoid a long, severe global depression.
The Federal Reserve has been criticized by President Donald Trump and potential successor Kevin Warsh for keeping interest rates unchanged. Trump believes the Fed should reduce borrowing costs since he claims there is “no inflation.” However, Powell has not responded to these attacks, which has won him support among Republicans on Capitol Hill.
In his speech, Powell also praised American universities, including Princeton, which have come under sharp attack from the Trump administration due to funding cuts. He said they are a crucial national asset and urged people to appreciate their value.
Powell acknowledged that the Fed could have moved faster to raise interest rates as inflation rose in 2021. However, he defended the Fed’s pandemic record, saying its collective efforts saved the economy and deserve respect and gratitude.
Source: https://apnews.com/article/princeton-speech-jerome-powell-a4a5e1604af0c4670374e4682844f66e