Administration officials have publicly lauded Mr. Powell since the Silicon Valley Bank failure. Karine Jean-Pierre, the White House press secretary, told reporters this week that there was no risk to Mr. Powell’s position as Fed chair from his handling of financial regulation.
“The president has confidence in Jerome Powell,” she said.
Ms. Jean-Pierre also reiterated the administration’s longstanding refusal to comment on Fed interest rate decisions. “They are independent,” she said, adding: “And they are going to make their decision — their monetary policy decision, as it relates to the interest rate, as it relates to dealing with inflation, which are clearly both connected. But I’m just not going to — we’re not going to comment on that from here.”
There was wide debate on what interest rate announcement Mr. Biden should have been hoping to hear on Wednesday afternoon.
Some economists and commentators have pushed the Fed to hold off on raising rates entirely, contending that another increase risks further rattling the banking system — and consumers’ confidence in it.
Liberal senators like Elizabeth Warren, Democrat of Massachusetts, and progressive groups in Washington have urged the same for months but for a far different reason. They argue that continued rate increases could slam the brakes on economic growth and throw millions of Americans out of work, and they say the real drivers of inflation are corporate profiteering and snarled supply chains, which will not be tamed by higher borrowing costs.
Senator Chuck Schumer, Democrat of New York and the majority leader, weighed in on the rate increase, saying he was “concerned about its effect on the economy.” He also acknowledged that it was a “very tough decision” with “competing equities on both sides.”
Rakeen Mabud, the chief economist at the Groundwork Collaborative, a liberal policy group in Washington, said that “I don’t think the Fed should be touching interest rate hikes with a 15-foot pole.”
