The Latest: House panel chairman defends Fed’s independence

The Latest: House panel chairman defends Fed’s independence
Federal Reserve Board Chair Jerome Powell leaves after the hearing on the economic outlook, on Capitol Hill in Washington, on Wednesday, Nov. 13, 2019. (AP Photo/Jose Luis Magana)

WASHINGTON (AP) — The Latest on Federal Reserve Chairman Jerome Powell’s testimony before the House Budget Committee on Thursday (all times local):

10:45 a.m.

John Yarmuth, Democrat from Kentucky and chairman of the House Budget Committee, is defending the Federal Reserve from the attacks leveled by President Donald Trump.

Yarmuth on Thursday called the president’s repeated attacks on the Fed, “unacceptable and dangerous.”

Trump has called Fed officials “boneheads” and has asked which is the bigger enemy, Fed Chairman Jerome Powell or China’s President Xi Jinping.

Historically, the Fed’s independence has been respected by presidents from both parties, though many presidents have privately pressured the Fed.

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10:30 a.m.

Federal Reserve Chairman Jerome Powell is asking Congress to tackle the growing budget deficit.

Powell’s remarks before the House Budget Committee Thursday came a day after he told Congress’ Joint Economic Committee that the Fed was likely to keep rates unchanged in the coming months, unless there was a “material” shift in the economy’s outlook.

Powell is one of the few leading public figures urging Congress to reduce the federal government’s annual deficit, which is nearing $1 trillion.

A large deficit will make it harder for Congress to cut taxes or boost spending when the next recession hits, Powell said. That is a concern because with the Fed’s benchmark interest rate already low, the Fed also has a limited ability to respond to downturns.