Some Fed officials confident next Fed chair will uphold mission despite Trump attacks

By Michael S. Derby and Howard Schneider

Jan 13 (Reuters) - Even as President Donald Trump has laid out clear markers as to what he expects for his upcoming selection as Federal Reserve chair, some current central bankers remain confident that whoever gets the job will stick to the Fed’s mission in part as the weight of ​responsibility becomes clear to the new leader.

“My sincere hope” is that whoever the president picks to succeed Jerome Powell when his term ends in May will understand the central ‌bank’s official mission of low inflation and maximum job growth as laid out by Congress, Federal Reserve Bank of New York President John Williams told reporters Monday.

Williams said he’s confident that whoever gets tapped for the job will understand the stakes ‌of their role and the consequences of failure. He added his long tenure at the central bank gives him hope any incoming leader will rise to the mission.

“The one constant in my experience of the Fed is that once you walk in these doors, you understand that we have a very, very important responsibility to the American people,” Williams said. “When we don't get it right, it matters a lot. When we get it right, it matters a lot, and my hope would be that anyone who comes into that role would come in with that understanding, and do their very best” to uphold the mission set ⁠out by Congress.

Speaking on Tuesday on an MNI webcast, St. Louis ‌Fed President Alberto Musalem offered a similar view. “I expect the new chair to be very committed to the dual mandate of maximum employment and price stability,” the official said.

“All of my colleagues and I are committed to setting monetary policy, the best monetary policy for the economy at a particular time and ‍for all Americans,” Musalem said, adding “I don't expect that commitment to change, regardless of who is the chair.” He also said when it comes to setting policy, “I expect the reaction function to be maintained, and I expect it to be communicated very effectively to the public.”

UNDER ATTACK

The confidence expressed by the two men comes as the Fed is under unprecedented attack from the president on multiple fronts. Since returning to office a year ago, Trump ​has repeatedly blasted Powell and tried to command the Fed to cut rates very aggressively even as inflation has been well above the 2% target and his trade policies have worsened ‌price pressures.

Trump has also repeatedly threatened to fire Powell for a range of reasons and has also explicitly stated that whoever he selects to take over for the current Fed leader will cut interest rates aggressively.