Adam Posen

elected official wants.

This kind of political propositioning then leads people to expect inflation and that becomes self-fulfilling.

And you create a situation where people expect inflation and you just get more inflation, which is bad for the country.

I think Chair Powell, who has been extremely restrained and careful under huge attacks on him, as mentioned, Governor Cook, former Vice Chair Mike Barr and others on the Fed, finally realized that he had to draw a line and he had to make an appeal that would

lead to Congress getting involved and realizing what's at stake.

And he had to make an appeal so that the public and markets would see that this was at least as unprecedented for the president to do something like this.

It may be that they did cost overruns on the new building renovation at the Fed.

But anyway, even if they did, that's something that Congress reviews and isn't criminal and wasn't anybody's fraud and wasn't the personal gain of Chair Powell.

So I think he felt he didn't have a choice at this point.

The Fed has always been much more answerable to Congress than the president.

Because Congress has the committees, the Banking Committee in the Senate, the Finance Committee in the House, that oversee, according to the Federal Reserve Act, how well the Fed is doing.

Do they have the right priorities in setting the priorities for the Fed?

So it was also, as so many things are these days, about calling on Congress to step up and exercise its constitutional role.

I think that's part of why Chair Powell finally broke and felt he had to speak bluntly.

I think one of what happens to the Fed is you get a paralysis.

You get a paralysis because there's all kinds of machinations that go on.

There are two jobs that Chair Powell actually has.

He is the chair of the Board of Governors,

and he's the chair of the Federal Open Market Committee.

The reason this matters is, first, Chair Powell's term as a governor, not as chair of the Board of Governors, goes on for several more years.