If you read any overdramatized market wraps produced by mainstream financial media outlets headed into Tuesday, you might’ve worried Jerome Powell was poised to deliver a veritable death blow to any lingering good vibes engendered by last week’s “Goldilocks” US jobs report. After all, the December FOMC minutes contained an unusually explicit reference to the counterproductive nature of stock rallies vis-à-vis the inflation fight.

However, if you took a few minutes to read about the event Powell was participating in on Tuesday, your anxiety level would’ve been greatly reduced.

“[The] Riksbank is organizing an international symposium to mark the end of Stefan Ingves’ time as governor,” Sweden’s central bank explained, in a press release almost two months ago. “Senior central bank officials and prominent academics will participate in four panels that address central bank independence from various angles — climate, payments, mandates and global policy coordination.”

So, basically, Powell was participating in a retirement party for Ingves. That’s not typically the kind of event where one endeavors to trigger a stock market selloff.

Granted, the topic was central bank independence, and policymakers are beset from both sides of the political spectrum currently. The right is keen to fault central banks for “letting” inflation run away from them, and the left is preemptively assigning blame for a recession that hasn’t happened yet.

In that context, there was certainly room for Powell to inadvertently upset risk assets if he leaned too hard into the independent theme. But he didn’t. His speech was very short, wholly unexciting and, if I may, pretty hollow. To wit, from Powell’s remarks:

The case for monetary policy independence lies in the benefits of insulating monetary policy decisions from short-term political considerations. Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time. But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy. The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors. I believe that the benefits of independent monetary policy in the US context are well understood and broadly accepted.

In a well-functioning democracy, important public policy decisions should be made, in almost all cases, by the elected branches of government. Grants of independence to agencies should be exceedingly rare, explicit, tightly circumscribed, and limited to those issues that clearly warrant protection from short-term political considerations.

With independence comes the responsibility to provide the transparency that enables effective oversight by Congress, which, in turn, supports the Fed’s democratic legitimacy. At the Fed, we treat this as an active, not passive, responsibility, and over the past several decades we have steadily broadened our efforts to provide meaningful transparency about the basis for, and consequences of, the decisions we make in service to the American public. We are tightly focused on achieving our statutory mandate and on providing useful and appropriate transparency.

We often describe the Nixon experience as an aberration, but that’s not really accurate. The notion of an independent central bank is relatively new. Indeed, in the long arc of human history, it’s fair to say the concept of an independent monetary authority not directly and explicitly beholden to the political class is a very recent idea, at least as far as ideas with broad-based buy-in across locales go.

So, when you think about Nixon, it’s probably more accurate to describe that sordid episode as an especially (and unacceptably) egregious example of politicized monetary policy, not as some sort of deviation from the historical mean as we knew it at the time.

In any case, Powell knows a lot about this, not because he’s a scholar, but rather because he served as the central bank chief for America’s only autocratic president. Donald Trump began assailing Powell during the trade war and didn’t stop until the pandemic forced the Fed into unprecedented emergency interventions.

Subsequently, Powell came under fire for allowing inflation to accelerate. The optics were made worse by the Fed’s adoption of flexible average inflation targeting in August of 2020, a decision predicated, in part anyway, on a Progressive view of the Phillips curve. Now, Powell is under attack from the likes of Elizabeth Warren, who worries the most aggressive Fed hikes in a generation are poised to drive the economy off a cliff.

Powell, then, could say a lot about central bank independence if he really wanted to. But paradoxically, doing so would be to traffic in political rhetoric and thereby risk undermining the message.

On Tuesday, he said simply that the Fed “must continuously earn [its] independence by using our tools to achieve our assigned goals of maximum employment and price stability, and by providing transparency to facilitate understanding and effective oversight by the public and their elected representatives in Congress.”

Now everybody bid Stefan Ingves a fond farewell.