The Federal Reserve is highlighting its political independence as the presidential campaign heats up

WASHINGTON (AP) — The Federal Reserve is stressing the importance of its political independence as Donald Trump, who has frequently attacked the Fed’s policymaking process in the past, moves closer to officially becoming the Republican presidential nominee.

On Friday, the Fed released its twice-yearly report on its interest rate policies, a typically dry document that primarily includes analysis of job growth, inflation, interest rates and other economic trends. The report includes short text boxes that focus on often technical issues such as monetary policy rules.

The report is usually released on Friday before the Fed chairman testifies to House and Senate committees as part of the central bank’s semiannual report to Congress.

Many of the boxes appear regularly in most reports, such as one that focuses on employment and income for different demographic groups. Friday’s report, however, includes a new box titled “Monetary Policy Independence, Transparency and Accountability.” There the Fed emphasized the vital need for it to operate independently of political pressures.

“There is broad support for the principles behind independent monetary policy,” the report said. “Operational independence of monetary policy has become the international norm, and economic research indicates that economic performance has tended to be better when central banks have such independence.”

Such statements suggest the Fed is trying to shore up congressional support for its independence, which Chairman Jerome Powell cited earlier this week as a crucial bulwark against political attacks on the Fed.

A Fed spokesman declined to comment on the inclusion of the text box.

“I think support for Fed independence is very high where it really counts on Capitol Hill, across both political parties,” Powell said Tuesday during a monetary policy conference in Portugal.

Before the pandemic hit in 2020, Trump as president repeatedly called on the Fed to cut its benchmark interest rate, which can lower the cost of borrowing for consumers and businesses and boost the economy.

In 2018, as the Fed gradually raised its key rate from the ultra-low levels that were in place after the Great Recession, Trump, in a highly unusual attack by a sitting president, called the central bank “the my biggest threat.”

And he said, referring to Powell, “I’m not happy with what he’s doing.”

Trump initially nominated Powell as Fed chairman, and President Joe Biden later nominated him for a term that will end in May 2026. Trump has already indicated he would not renominate Powell if re-elected president.

Powell, asked Tuesday about the potential threat to the Fed’s independence should Trump be re-elected, said: “I don’t focus on that at all.”

“I really think we continue to do our job,” Powell continued. “I mean, the U.S. economy — we have 4 percent unemployment, it’s growing at 2 percent. Inflation is 2.6%. Let’s continue this. Let’s do our job. History will judge.”

Christopher Rugaber, Associated Press