(Bloomberg) - The Federal Reserve released transcripts Friday of policy meetings during 2018.
It was the year Jerome Powell took the helm of the US central bank, overseeing four interest-rate increases to tighten policy amid falling unemployment and despite low inflation. The Fed finally hit its 2% inflation target in March — after spending much of the previous six years below it.
Powell, who was tapped by President Donald Trump to replace Janet Yellen, largely picked up where his predecessor left off. The Fed chair extended efforts to return rates to more normal levels after policymakers held them near zero since the financial crisis. He also continued overseeing the reduction of the Fed’s balance sheet, though markets gyrations at the end of the year would set the stage for conversations in early 2019 on how to end the runoff.
Powell also made his debut at Jackson Hole, laying out a doctrine of basing monetary policy as much on how the economy performs in reality as on the prescriptions of academic models, a view that prevails in his approach to policymaking today.
But the Fed’s 2018 policy moves were overshadowed by an even bigger challenge for the US central bank — intense political pressure on Powell & Co. from the White House. Trump used his bully pulpit to berate the Fed chief for his series of rate increases that year, breaking with decades of protocol that US presidents avoid commenting on monetary policy out of respect for the Fed’s independence.
Meanwhile, the package of tax cuts Trump signed in late 2017 was delivering a jolt of fiscal stimulus to the economy. And the president’s tough trade stance against China continued to create a sometimes turbulent backdrop as the Fed calibrated its rate-hike campaign.
By Craig Torres, Catarina Saraiva and Alexandra Harris
