Financial Services Association, December 5 (Editor Shi Zhengcheng) On Wednesday afternoon local time, at the Manhattan venue only 1 kilometer from the “CEO assassination” that shocked the United States, Federal Reserve Chairman Powell participated in a public interview event to discuss topics of great concern to the outside world, such as the new Trump administration.

Unlike serious policy discussions on weekdays, although policy discussions are inevitable, Wednesday is more like a miscellaneous discussion session with the Federal Reserve Chairman.

Knock on your door and change your life

As we all know, Powell earned a bachelor's degree in political science at Princeton, and later got a JD degree in law from Georgetown University. But he can go from lawyer to chairman of the Federal Reserve; let's start by knocking on the door once.

After graduating from college, Powell first worked in law for 6 years, then moved to investment bank Dylan Reed in 1984 to work in finance, commercial banking, and mergers and acquisitions. And the chairman at the time, Nicholas Brady, not only had experience as a senator, but later became the finance minister of the Reagan and George W. Bush administration.

Powell explained that when he was studying, he didn't have a very clear concept; his only thought was that he would stay in the private sector for most of his life and then take up some public office from time to time.

The Federal Reserve Chairman explained, “One day, I forced myself to go upstairs and knock on the door of Brady's ultra-luxurious office and told him that if he were to go to Washington DC to work in the future, I would be happy to work for you.”

After Brady listened, he asked his assistant to write Powell's name down, then he left quietly. Unexpectedly, after a few months, Powell received a phone call asking him to “come up.” Since then, the two have been working together. Powell moved to the Ministry of Finance in 1990 and became Deputy Minister of Domestic Finance at the Ministry of Finance in 1992. His tenure included persuading Buffett to take over the Solomon Brothers mess.

Powell stressed that if he hadn't overcome his fears in the beginning, including the fear that Mr. Brady had misunderstood his intentions, he would not have been able to sit where he is today.

Even though he worked at the Treasury Department, Powell said that at that time he never thought he would one day work at the Federal Reserve. He followed up because he studied the debt ceiling issue after the subprime mortgage crisis and helped the Obama administration persuade the Congressional Republican Party to raise the debt ceiling. In return, Obama sent Powell to the Federal Reserve Board of Governors.

Talking about the Trump administration: there will be no “shadow Federal Reserve”

As in the past, Powell continues to mechanically emphasize that the independence of the Federal Reserve is protected by US law.

But Trump has also discussed the idea of a “shadow Federal Reserve” — releasing “forward-looking guidance” to the outside world by appointing a shadow Federal Reserve chairman in advance, making Powell's real speech unimportant.

Powell gave this a meaningful look.

He also said that this is unlikely to happen; the relationship between the Federal Reserve and various government departments has a fixed format, especially with the Ministry of Finance. For the past 75 years, the Chairman of the Federal Reserve and the Treasury Secretary have met once a week for dinner, sometimes for breakfast, and sometimes for lunch. More importantly, agencies will also respect their own boundaries and boundaries of power.

Although Powell is also a “Wall Street veteran,” he revealed that he is unfamiliar with Bezent, the finance minister nominated by Trump. At the same time, he is also confident that he will get along with (him) other finance ministers.

Powell also explained why “Trump tariffs” cannot now be included in policy considerations: “We don't know how much tax will be added, we don't know the exact time, which products will be affected, we don't know which countries will be taxed, we don't know how the tariffs will be transmitted to the price, and we don't know how other countries will retaliate, so it is impossible to make a policy based on so much ignorance.”

Powell said that the Federal Reserve will model, evaluate, and observe tariff issues, but monetary policy is about what is happening right now.

The US economy is better than expected in September

In his statement on the US economy, Powell said that the economic situation is “very good”. While inflation is falling, the unemployment rate is relatively low. He added that the economy is stronger than expected in September, and the Federal Reserve can afford to be more cautious in lowering interest rates.

He also responded that the excessive interest rate cut in September was intended to send a signal that the Federal Reserve is ready to support the labor market at any time if the labor market continues to weaken.

In response to the question that the Biden administration's non-farm payrolls data is always adjusted, Powell said this is a typical example of the job market trend, and at the same time, the non-farm payroll survey data is also one of the best labor force data. The final employment data will be adjusted through tax filing data, but the survey-based non-farm payroll report is still the earliest data available.

Talk about Bitcoin

Regarding cryptocurrencies, and the potential US Bitcoin National Reserve, Powell emphasized that Bitcoin's competitor is gold, not the US dollar.

Powell said that Bitcoin is just like gold; it's just virtual. People don't use Bitcoin as a tool to pay or store value; it's too volatile. So Bitcoin is not a competitor to the US dollar; it is competing with gold.

Shortly before Powell said this, US President-elect Trump announced the nomination of cryptocurrency supporter Paul Atkins as the chairman of the US Securities and Exchange Commission. This appointment also boosted the price of Bitcoin in the short term, from about $0.095 million to $0.099 million.

In addition to supporting cryptocurrencies, Atkins has also criticized banking regulatory policies after the subprime mortgage crisis, such as the Dodd-Frank Act, which overburdened the banking industry.