Panelists on Kudlow, David Bahnsen and EJ Antoni, discussed the potential removal of Federal Reserve Chair Jerome Powell from office. On Wednesday, the Federal Reserve announced that it would maintain its benchmark interest rate as policymakers continue to monitor inflation and the labor market amidst economic uncertainty.
The central bank decided to keep the federal funds rate within the range of 4.25% to 4.5%. This decision follows the Fed’s previous meetings in January and March, where rates were also left unchanged after three consecutive cuts in prior sessions. These included a 50-basis-point decrease in September and two 25-basis-point reductions in November and December.
The Federal Open Market Committee (FOMC), which directs the central bank’s monetary policy, stated that economic uncertainty has increased. The FOMC is monitoring risks related to its dual mandate, noting increased dangers of higher unemployment and inflation.
The FOMC indicated that despite fluctuations in net exports impacting the data, economic activity has continued to expand steadily. The unemployment rate has remained low, with labor market conditions solid, though inflation is still somewhat elevated.
Federal Reserve Chair Jerome Powell remarked that the economy is in a strong position despite heightened uncertainty. He observed that inflation, although decreased significantly, remains slightly above the Fed’s 2% long-term goal.
Powell highlighted that the new administration is implementing major policy changes in trade, immigration, fiscal policy, and regulation. He noted that these policy shifts are substantial and developing, with uncertain effects on the economy. Persistent tariff increases might lead to higher inflation, slower economic growth, and rising unemployment.
Powell added that the inflationary effects of these tariffs could either be temporary or more enduring, depending on the size and duration of the tariff impacts and their integration into prices. The Fed’s role is to ensure that long-term inflation expectations remain stable.
This article will be updated as more information becomes available.
