Powell warns Fed’s inflation fight could spark political opposition

Published

2 years ago

January 10, 2023

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close video Powell is going to push forward rate hikes: Danielle DiMartino Booth

Quill Intelligence LLC CEO and chief strategist gives her take on what is next for the Federal Reserve on ‘Making Money.’

Federal Reserve Chairman Jerome Powell on Tuesday stressed that central bank policymakers remain committed to wrestling high inflation under control, even though the methods to do so can prove to be politically unpopular.

"Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time," Powell said Tuesday in remarks prepared for delivery at a conference held by Sweden's central bank. "But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy."

The Fed's structure – in which it makes decisions free of oversight by elected officials – allows it to take "these necessary measures without considering short-term political factors," he added.

In his speech, Powell largely stuck to the topic of central bank independence and did not comment on where monetary policy may be headed in coming months. Policymakers last year voted to raise interest rates seven straight times to a range of 4.25% to 4.5%, well into restrictive territory. In speeches since then, officials have signaled that additional hikes are coming – and that they intend to hold rates at elevated levels for some time.

Federal Reserve Chairman Jerome Powell speaks during a news conference at the Federal Reserve Board building in Washington, Wednesday, July 27, 2022. (AP Photo/Manuel Balce Ceneta / AP Images)

Although Powell received broad bipartisan support last year for another four years at the helm of the Fed, he has also faced backlash from members of both political parties over the central bank's role in the inflation crisis. Democrats, including Sen. Elizabeth Warren of Massachusetts, have warned the rapid rate hikes could lead to "widespread" job losses, while Republicans have accused the Fed of gross oversight for the spike in consumer prices.

On top of that, climate activists and some lawmakers have demanded the Fed take further action on climate change in order to shift the U.S. economy away from fossil fuels. The Fed has asked six of the nation's biggest banks to participate in a scenario designed to measure their response to climate-related financial risks, but has done little else on the matter.

Powell acknowledged the Fed has "narrow, but important responsibilities" regarding managing potential risks created by climate change, he said the central bank must stick to its dual mandate: Ensuring price stability and maximum employment through interest rate policies.

The Marriner S. Eccles Federal Reserve building in Washington, D.C., US, on Wednesday, July 6, 2022. (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)

"We should 'stick to our knitting' and not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities," Powell said. "Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence."

Politics

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June 20, 2025

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UK

MPs back legalising assisted dying in England and Wales after historic Commons vote

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60 mins ago

June 20, 2025

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MPs back legalising assisted dying in England and Wales after historic Commons vote

MPs have voted to approve a historic bill that would legalise assisted dying in England and Wales.

The Terminally Ill Adults (End of Life) Bill was approved by 314 votes to 291 at its third reading in the House of Commons – a majority of 23.

Politics Live: MPs back legalising assisted dying in historic Commons vote

Labour MP Kim Leadbeater, who proposed the legislation, was seen crying in the chamber as it went through.

Campaign group Dignity in Dying hailed the result as “a landmark moment for choice, compassion and dignity at the end of life”.

“MPs have listened to dying people, to bereaved families and to the public, and have voted decisively for the reform that our country needs and deserves,” said Sarah Wootton, its chief executive.

The bill will now go to the House of Lords, where it will face further scrutiny before becoming law.

Due to a four-year “backstop” added to the bill, it could be 2029 before assisted dying is actually offered, potentially coinciding with the end of this government’s parliament.

The bill would allow terminally ill adults with fewer than six months to live to apply for an assisted death, subject to approval by two doctors and a panel featuring a social worker, senior legal figure and psychiatrist.

MPs have deliberated the proposals for months, with a vote in November passing with a bigger majority of 55.

Since then it has undergone some significant changes, the most controversial being the replacement of a High Court Judge’s approval with the expert panel.

Ms Leadbeater has always insisted her legislation would have the most robust safeguards of any assisted dying laws in the world.

Opening the debate on Friday she said that opposing the bill “is not a neutral act. It is a vote for the status quo”.

She warned that if her plan was rejected, MPs would be asked to vote on it again in 10 years and “that fills me with despair”.

MPs have brought about historic societal change

A chain of events that started with the brutal murder of an MP almost 10 years ago has today led to historic societal change – the like of which many of us will never see again.

Assisted dying will be legalised in England and Wales. In four years’ time adults with six months or less to live and who can prove their mental capacity will be allowed to choose to die.

Kim Leadbeater, the MP who has made this possible, never held political aspirations. Previously a lecturer in health, Ms Leadbeater reluctantly stood for election after her sister Jo Cox was fatally stabbed and shot to death in a politically motivated attack in 2016.

And this is when, Ms Leadbeater says, she was forced to engage with the assisted dying debate. Because of the sheer volume of correspondence from constituents asking her to champion the cause.

Polls have consistently shown some 70% of people support assisted dying. And ultimately, it is this seismic shift in public opinion that has carried the vote. Britain now follows Canada, the USA, Belgium, Switzerland, the Netherlands and Australia. All countries with sophisticated health systems. Nowhere has assisted dying been reversed once introduced.

The relationship between doctor and patient will now also change. The question is being asked: Is an assisted death a treatment? There is no decisive answer. But it is a conversation that will now take place. The final answer could have significant consequences, especially in mental health settings.

There are still many unknowns. Who will be responsible for providing the service? The NHS? There is a strong emotional connection to the health service and many would oppose the move. But others will argue that patients trust the institution and would want to die in its arms.

The challenge for health leaders will be to try and reconcile the bitter divisions that now exist within the medical community. The Royal Colleges have tried to remain neutral on the issue, but continued to challenge Ms Leadbeater until the very end.

Their arguments of a failure of safeguards and scrutiny did not resonate with MPs. And nor did concerns over the further erosion of palliative care. Ms Leadbeater’s much-repeated insistence that “this is the most scrutinised legislation anywhere in the world” carried the most weight.

Her argument that patients should not have to fear prolonged, agonising deaths or plan trips to a Dignitas clinic to die scared and alone, or be forced to take their own lives and have their bodies discovered by sons, daughters, husbands and wives because they could not endure the pain any longer was compelling.

The country believed her.

The assisted dying debate was last heard in the Commons in 2015, when it was defeated by 330 votes to 118.

There have been calls for a change in the law for decades, with a campaign by broadcaster Dame Esther Rantzen giving the issue renewed attention in recent years.

Supporters have described the current law as not being fit for purpose, with desperate terminally ill people feeling the need to end their lives in secret or go abroad alone, for fear loved ones will be prosecuted for helping them.

Ahead of the vote, an hours-long emotionally charged debate heard MPs tell personal stories about their friends and family.

Maureen Burke, the Labour MP for Glasgow North East, spoke about how her terminally ill brother David was in so much pain from advanced pancreatic cancer that one of the last things he told her was that “if there was a pill that he could take to end his life, he would very much like to take that”.

She said she was “doing right by her brother” in voting for it.

How did MPs vote?

MPs were given a free vote, meaning they could vote with their conscience and not along party lines.

The division list shows Prime Minister Sir Keir Starmer voted in favour of the bill, but Conservative leader Kemi Badenoch voted against.

Health Secretary Wes Streeting and Justice Secretary Shabana Mahmood, who will have to deliver the bill, also voted no.

Read more: Find out how your MP voted

Bill ‘poorly drafted’

Opponents have raised both practical and ethical concerns, including that people could be coerced into seeking an assisted death and that the bill has been rushed through.

Veteran Labour MP Diane Abbott said she was not opposed to the principle of assisted dying but called the legislation “poorly drafted”.

Former foreign secretary James Cleverly echoed those concerns, saying he is “struck by the number of professional bodies which are neutral on the topic of assisted dying in general, but all are opposed to the provisions of this bill”.

Recently, the Royal College of Psychiatrists, the Royal College of Pathologists and the Royal College of Physicians have raised concerns about the bill, including that there is a shortage of staff to take part in assisted dying panels.

However, public support for a change in the law remains high, according to a YouGov poll published on the eve of the vote.

The survey of 2,003 adults in Great Britain suggested 73% of those asked last month were supportive of the bill, while the proportion of people who feel assisted dying should be legal in principle stood at 75%.