Powell: The interest rate costs of the government are not considered in the formulation of monetary policy.

[Powell: No consideration of government interest costs in monetary policy formulation] Fed Chairman Powell stated on Wednesday that the Fed does not consider the space for government financing needs when formulating interest rate policy. In a news conference following the FOMC meeting, Powell stated that the Fed is tasked by Congress with the mission of controlling inflation while maintaining a strong labor market as much as possible. He indicated that in light of this statutory duty, "we do not consider the fiscal needs of the federal government. No central bank in any developed economy would do this," and such an approach would undermine the credibility of the Fed. The U.S. government's interest expenditures last year amounted to $1.1 trillion, and the cost of government debt management has more than doubled compared to pre-pandemic levels, largely due to the Fed maintaining high interest rates to reduce inflation levels. Trump once said that if rates were lowered by 3%, the U.S. would save $1 trillion annually.