By Evaristo Lara
After eight years of serving as head of the Federal Reserve (Fed), Jerome Powell handed over the reins to Kevin Warsh who was nominated to succeed him.
During Donald Trump’s first stage as president of the nation, it was he who nominated the New York lawyer to replace Janet Yellen as head of the Fed.
At the time, it was all praise for Powell’s ability to direct the country’s monetary policy, control inflation, and manage the financial system with the goal of keeping the economy stable.
During that stage of the government, the US economy was growing above 4% and inflation was around 2%.
In fact, In his first year on the job, the New Yorker who graduated from Princeton University raised the interest rate four times. However, Trump asked for greater flexibility.
The litmus test for Powell arose from the Covid pandemic, as the economy came to a sudden halt and this forced him to cut the benchmark by one and a half points until it left it at virtually 0%.
For two years, interest rates remained unchanged until, in February 2022, with prices rising nearly 8% year-on-year, the Fed ordered a rate hike. Despite this, inflation skyrocketed to levels rarely seen before.
With Trump’s return to Washington, the situation became more uncomfortable for the 73-year-old New Yorker, given the pressure exerted by the Republican trying to show him the route on how to handle the Fed.
In the last 16 months of his administration, Jerome Powell had to endure the president’s threats to find a way to remove him and, although legally from the beginning this was impossible to achieve, the news media repeatedly took it upon themselves to reproduce Donald Trump’s insults towards him, trying to make him look incompetent and even responsible for the lethargy of the economy.
On the other hand, the Fed president always distanced himself from the White House and even before concluding his term he warned that he would continue working for the central bank as governor following the conclusion of an ongoing investigation related to performance.
Keep reading:
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