President Barack Obama met with Federal Reserve Chair Janet Yellen on Monday to discuss the U.S. economy amid signs that growth may be slowing as consumers retreat from spending.
Ahead of the afternoon meeting, White House Press Secretary Josh Earnest described Obama as “pleased” with Yellen, who he appointed to lead the Fed in 2014. It is the first time since November 2014 that the Fed chair has met with the president on her own. The meeting was closed to the news media.
The backdrop is an economy showing signs that it’s hit a soft patch. Consumers, who’ve been keeping growth afloat, reined in spending at the start of 2016, with auto sales last month slumping to the lowest level in a year. Weakening demand abroad and a relatively strong dollar are causing the trade deficit to grow and companies have cut output to trim bloated inventories.
“It’s an opportunity for them in some ways to trade notes on something they’re both looking at quite carefully,” Earnest told reporters before the meeting, while emphasizing Yellen’s independence from the president.
Asked if Obama has been happy with Yellen’s work since appointing her in 2014, Earnest called it “an interesting question” and said “the president has been pleased with the way she has fulfilled what is a critically important job.”
Some economists last week cut their tracking estimates for growth in first-quarter gross domestic product to near zero, following a 1.4% gain in the last quarter of 2015. That would mark the weakest six months in about three years.
Obama and Yellen “discussed both the near- and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally,” the White House said in a statement after the meeting. They also discussed Obama administration efforts to strengthen the government’s regulation of Wall Street, the statement said.
Last week, Yellen said that there had been “tremendous progress” since the recession that began in 2007, but warned that broader measures of unemployment were “higher than one would expect.” While cautioning that some slack remains in the U.S. labor market, Yellen said many measures of unemployment “really suggest a labor market that is vastly improved,” while speaking on a panel with three of her predecessors Thursday in New York.
The Fed raised interest rates for the first time in nearly a decade last December, but has recently signaled that it would exercise caution on additional hikes because of concerns about a flagging global economy.
Obama is increasingly seeking to burnish his legacy on financial regulation. In his weekly radio address to the nation on Saturday, Obama touted new rules unveiled last week by the Labor Department that require financial advisors to act in their clients’ best interests and new Treasury Department regulations intended to crack down on companies that attempt to avoid U.S. taxes by merging with foreign partners, called inversions. “My administration took two big steps that will help make sure your hard work is rewarded, and that everybody plays by the same rules,” Obama said.
He has lately encountered friction in Congress, though, as he tries to fill vacancies on the Federal Reserve board.
Senate Banking Committee Richard Shelby, an Alabama Republican, is blocking confirmation of two nominees to the board until Obama names a vice chairman for supervision, a position created in the 2010 Dodd-Frank financial regulation law.
The White House hasn’t said why it has never nominated someone for the job, intended to focus the Fed on the regulation of financial markets.
“I don’t have any personnel announcements to make,” Earnest said on Monday at a briefing. He called on the Senate to confirm the board nominees anyway.
“It is a tough case to make for Senator Shelby to say that he’s not going to fill any vacancies on the Fed until one specific vacancy has been filled,” he said.
Shelby, in an interview last week, said he intends to continue to block the nominees over the vice chair position.
— With assistance from Michelle Jamrisko and Steven T. Dennis.