Powell's Parting Words: Stay Neutral, Stay Strong

Federal Reserve Chair Jerome Powell has some final advice for his successor, whose term ends in May:

"Stay out of politics."

Why Politics Matters

Powell emphasizes that the Federal Reserve must make decisions based on what's best for everyone, not just a few. If the Fed starts making politically motivated decisions, he warns, it will be difficult to regain public trust.

The Economy: Doing Well, But...

Powell acknowledges that while many people don't feel it, the economy is actually performing well. The Fed is closely monitoring data and will make decisions accordingly. However, he did not confirm whether interest rates will be cut at the next meeting in March.

Supreme Court Case: Fed's Independence at Stake

Powell also discussed a critical Supreme Court case that could determine whether the White House can control the Fed. He felt compelled to attend the hearing due to its immense importance.

Interest Rates: No Change, But Debate Continues

The Fed voted 10-2 to keep interest rates unchanged, between 3.5% and 3.75%.

• Some officials want to cut rates to boost the job market.
• Others believe rates should stay high to control inflation.

Despite new members on the committee, their views on interest rates remain similar to their predecessors.

Powell's Future Role

Powell's term as chair ends soon, but he may stay on as a governor to help protect the Fed's independence. There's also a small chance he could remain as chair, though this seems less likely.