Fed Chair Powell: Trump's Calls for Lower Rates Won't Sway Policy
WASHINGTON, D.C. -- Federal Reserve Chair Jerome Powell reiterated on Wednesday that President Donald Trump's demands for interest rate cuts will not influence the central bank's decision-making process.
In testimony before the House Financial Services Committee, Powell emphasized that the Fed would remain focused on data and economic conditions when setting rates. "Our decisions will be based solely on the evolving economic outlook," he stated.
Powell's comments came amid ongoing pressure from Trump, who has repeatedly urged the Fed to lower rates to support his economic agenda. However, the Fed has indicated that it will not cut rates further until there is evidence of sustained inflation near its 2% target.
Moreover, Powell noted that the Fed officials are closely monitoring the potential impact of Trump's trade policies, including tariffs, on the economy. Economists have expressed concerns that tariffs could lead to higher inflation.
Data released on Wednesday showed that consumer prices rose 3% in January compared to a year ago, up from a 2.4% increase in September 2019. This uptick further dampens the likelihood of an imminent rate cut by the Fed.
The Fed's interest rate influences borrowing costs throughout the economy, impacting mortgages, auto loans, and credit cards. While the Fed lowered rates three times last year, Powell reiterated that the current rate would remain unchanged until inflation showed signs of decline.