Fed Chair Powell Faces Scrutiny on Trump Policies, Monetary Stance at Congressional Hearings

Washington, D.C. - Federal Reserve Chair Jerome Powell will face a grilling on Capitol Hill this week, with both Democrats and Republicans likely to challenge him on a range of issues, including President Donald Trump's policies and the Fed's monetary stance.

Monetary Policy

Powell's testimony comes as the Fed faces uncertainty over the impact of Trump's trade, tax, and regulatory proposals on the U.S. economic outlook. While some Democrats will question Powell about tariff threats against Canada and Mexico, Republicans may press him on why he didn't speak out about inflation risks posed by COVID-relief spending under former President Joe Biden.

Diversity, Equity, and Inclusion (DEI)

Democrats may also grill Powell on the Fed's compliance with Trump's executive order to halt DEI initiatives. Maxine Waters, a top Democrat on the House Financial Services Committee, has expressed concern that the order violates the Dodd-Frank Act.

Bank Regulation

Trump has pushed for deregulation across federal agencies, including those that supervise banks. Republicans will likely test Powell's commitment to this agenda, including unfinished bank-capital proposals and the practice of "debanking."

Other Issues

In addition to these key themes, Powell may also face questions about the Fed's ongoing review of its monetary policy framework and its withdrawal from a climate research group.

Powell's Balancing Act

Powell will need to balance his desire to preserve his positive relationships with lawmakers with the Fed's need for independence. While he prefers to avoid partisan debates, he will likely face pressure to address Trump's policies with more clarity.

Key Appearances

Powell will appear before the Senate Banking Committee on Tuesday, February 26 at 10 a.m. ET and the House Financial Services Committee on Wednesday, February 27 at 10 a.m. ET.