Powell Says Fed Ignores Government Borrowing Costs in Rate Decisions

Federal Reserve Chair Jerome Powell said the central bank does not factor the government’s borrowing costs into its interest-rate deliberations, distancing monetary policy from fiscal considerations. Asked whether elevated rates could strain the federal budget through higher interest payments, Powell replied that “we don’t consider the fiscal needs of the federal government,” adding that no advanced-economy central bank does so. The remarks underscore the Fed’s commitment to setting policy solely on economic objectives such as inflation and employment, even as rising rates have pushed Treasury interest expenses to record levels. Powell spoke during a news conference on Wednesday after the Federal Open Market Committee’s latest meeting.