Fed Chairman Jerome Powell will try to not to upset markets or the White House when he speaks Wednesday.
Fed Chairman Jerome Powell is under pressure not to shake up markets or the White House when he briefs the media, following the Fed's two-day meeting Wednesday.
Fed watchers say the chairman will have to walk a fine line, so as not tilt too hawkish, which could unnerve markets and draw the ire of President Donald Trump. Trump launched a new Twitter attack on the Fed as it met on Tuesday, calling for a 1 percentage point rate hike and a return to quantitative easing.
Fed policy is currently somewhere in the middle, since the Fed has paused its rate hiking and is watching the economic data before it makes any further moves. If it were hawkish, the Fed would be leaning toward raising interest rates, and if it were dovish, it would be leaning toward easing policy and cutting interest rates.
Hill said the Fed officials will be careful not to sound too dovish because of both the record-high stock market and the desire to stress their independence and not seem like they can be influenced by Trump's demand for easier policy. "I think they want to sound even-keeled. The problem they run into is if they keep harping on low inflation it's going to sound really dovish. This is where it comes back to bite them if that's not really what they mean. If they don't mean they're going to cut rates because of it, why harp on it? He's going to have to balance what he says," said Boockvar.
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