Renomination 'Had Nothing To Do' With US Fed Policy Shift: Powell

With the US Federal Reserve set to take a more aggressive stance against inflation, central bank chair Jerome Powell said Wednesday there was no connection between the policy shift and his nomination for a second term.

The Fed had earlier in the day announced it would speed up the process of ending its bond-buying program, one of the stimulus measures it had implemented to rescue the economy during the coronavirus pandemic, which would allow it to raise rates before the middle of next year.

The move by the central bank's policy-setting Federal Open Market Committee (FOMC), on which Powell serves, came as the United States has seen widespread price increases in recent months, which have upped pressure on President Joe Biden's administration.

The Democratic president last month nominated Republican Powell for a second term as central bank chair, but addressing reporters following the conclusion of the FOMC meeting, Powell denied any connection between the Fed's moves to counter inflation and Biden's decision.

"Honestly, it had nothing to do with that at all and I just thought this is what we have got to do," Powell said.

He said his thinking on central bank policy was changed by data released in November that included employment and consumer price reports.

He added that he concluded a swifter pullback in stimulus was necessary 10 days before Biden chose to renominate him.

Powell also noted that other central bank officials had signaled publicly that a faster tapering of the bond-buying could be announced at the two-day FOMC meeting that concluded Wednesday, comments he said don't "happen by accident."

"We're always just going to do what we think is the right thing and I certainly will always just do what I think the right thing is for the economy and for the people that we serve."

The faster stimulus pullback will see the Fed cut its monthly asset purchases by $30 billion per month rather than the previous pace of $15 billion.

That will put the central bank on pace to end the bond-buying two months earlier and after that, potentially raise interest rates off zero, where they've been since the pandemic began.