Fed Chair Powell Reassures Lawmakers on Interest Rate Stability amidst Inflation Concerns
In his testimony before the Senate Banking Committee, Federal Reserve Chair Jerome Powell emphasized the Fed's cautious stance towards adjusting interest rates. With the economy remaining robust and inflation exhibiting signs of resilience, Powell asserted that the central bank is in no rush to alter its monetary policy.
Powell highlighted the Fed's mission to maintain maximum employment and stable prices. He acknowledged that the labor market is balanced and inflationary pressures are subdued, based on various indicators.
Regarding Donald Trump's economic policies, Powell noted that the president has granted the Fed autonomy, allowing the central bank to focus on its mandate. Furthermore, Treasury Secretary Scott Bessent reassured that Trump is not pressuring the Fed to lower short-term rates.
Elon Musk's concerns about the Fed's transparency were addressed by Powell during a press conference. He emphasized the Fed's diligent budgeting practices and accountability to the public.
Powell iterated that the Fed may consider cutting rates if the economy weakens unexpectedly or inflation falls drastically. However, with the strong January jobs report indicating a resilient labor market, economists expect the Fed to maintain its current benchmark rates for the foreseeable future.
Powell also emphasized that the Fed's monetary policy review will retain the 2% inflation goal, which remains a crucial component of the central bank's strategy.