Fed chair Powell rejects negative rates, brushes off latest Trump twitter blast

In the midst of his testimony to the House Financial Services Committee on the first of two days of semiannual testimony to Congress, Federal Reserve Chairman Jerome Powell drew an attack from a familiar corner: President Donald Trump, the man who nominated him to the Fed’s chairmanship but who has repeatedly attacked him since for not cutting rates more aggressively.

“Fed rate is too high,” Trump tweeted. “Dollar tough on exports.”

The president complained in his tweet that the Dow Jones Industrial Average had slipped during Powell’s testimony, though the Dow later recovered. It was unclear that Powell’s testimony had directly affected stock prices either way.

Asked during the hearing about the tweet, Powell gave his standard reply that he and other Fed officials are concerned only with their mandate to serve the economy and do not consider outside criticism — from the president or anyone else — in their policy-making.

“My colleagues and I are completely focused on using our tools to support ... our goals, and that is all we are focused on,” he said.

Powell was also asked about negative interest rates, a policy that Trump appeared to endorse in his tweet as a way to further boost the economy.

“That’s not a tool we’re looking at,” he said, noting that some research has suggested that negative rates could hurt banks’ profitability.-AP