The Federal Reserve will not cut short-term interest rates again, given the “overall strong” economy. Delivery at Senate Banking Committee hearings.
“The economy is generally strong and we have made great strides towards our goals over the past two years,” Powell said. The Fed's goal.
“There's no need to hurry to adjust policy stances. Used after the Fed stabilized interest rates at its January meeting, showing further reductions inflation and job markets remain healthy. Repeated the language that was done, Powell said.
Only mentioned obliquely in Powell's opening remarks is that the new Trump administration has imposed widespread new import taxes on several countries and industrial goods, and is the source of recent labor growth, and taxes are the source of taxes. It was the “risk and uncertainty” that the economy faces to enforce immigration as it is considering. and regulatory reforms.
“We are paying attention to risks on both sides of the dual mission,” Powell said in relation to the Fed's steady inflation and maximum employment targets established in the Federal Reserve Congress. “Policy is well suited to address the risks and uncertainties we face.”
Powell's Senate testimony addresses how many indicators influenced the already working economy, which was already well-functioning, by President Donald Trump. So this is the first of a two-day hearing at Capitol Hill.
Step carefully
Powell and other Fed officials are always careful to avoid judgments about the wisdom of administrative or parliamentary actions, focusing on how the economy will change as a result.
But given where the economy stands and the extent to which Trump thinks is intended, I hope the Fed premium will go slow for now and nothing will break.
After testifying to the Senate Banking Committee on Tuesday, Powell will appear before the House Financial Services Committee on Wednesday.
Both panels are now under Republican control, with new chairs.
Powell has prioritized nearly seven years as chairman to develop a close relationship on Capitol Hill, but there is much to ask him about both parties' senators.
Inflation is declining and is expected to continue doing so, but recent consumer surveys have shown that the public may be skeptical.
The possibility of sudden tariffs on close trading partners such as Mexico and Canada, as well as core industrial products such as steel and aluminum, has sparked debate over whether such import taxes cause general inflation. .
The administration has yet to develop detailed tax, expenditures or deregulation plans, but future negotiations on these issues could have a major impact on economic performance.
Meanwhile, the Fed faces a departure in one of its key positions with Michael Barr's resignation as vice-chair of bank oversight and regulation and the final appointment by Trump of alternatives, and the financial sector. There are major changes being made in the monitoring of the site.
For now, investors have read recent data, with jobs reports in January in particular claiming that the Fed rate will be reduced to 4% and wages are sharp. It shows an increase in pace.
The market still expects a quarter-point cut in the central bank's policy rate in June, but it has begun pricing for other movements this year.
At its January meeting, the Fed has stabilized its policy rates in the range of 4.25% to 4.5% after cutting full percentage points in its last three meetings in 2024.
“Powell hopes to largely repeat the message from the January FOMC meeting with a strong economy, a solid labor market and bumpy progress on inflation.”
“Recent tariff announcements also strengthened the patience lawsuit, as uncertainty about inflation appears to be growing.”
