Federal Reserve Bank Chairman Jerome Powell testifies before the House Financial Services Committee on the Rayburn House Office Building in Capitol Hill on March 6, 2024 in Washington, D.C.
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Federal Reserve Chairman Jerome Powell on Tuesday reiterated his commitment to overthrow central banks’ inflation, indicating that policymakers are not in a hurry to lower interest rates.
Speaking before the Senate Banking Committee, Powell has eased “solid” labor markets and inflation, but “strong” labor markets and inflation exceeding the federal 2% target, ” “A strong overall.”
With these conditions widespread, he said the Fed does not need to move quickly to ease monetary policy.
“Our policy stance is far less restrictive than ever and the economy remains stronger, so there’s no need to rush to adjust our policy stance,” Powell said. “I know that policy suppression too quickly or too much can hinder inflationary progress, while at the same time, slow or too little can lead to unfair weakening of economic activity and employment if policy suppression is slow or too little can lead to unfair reductions in economic activity and employment. It’s there.”
Powell’s comments were the first of two appearances this week on Capitol Hill. He will speak to the Senate Banking Committee on Tuesday and to the House Financial Services Committee on Wednesday.
The shares were temporarily soaked following his opening statement, but little changed after two hours of trading.
Much of the procedure focused on bank oversight rather than monetary policy.
Massachusetts Sen. Elizabeth Warren’s ranking accused President Donald Trump of halting his work at the Consumer Financial Protection Agency of leaving consumers without guards at the country’s largest bank.
Warren asked Powell, who controls consumer compliance outside of the CFPB, and replied, “No other federal regulators can say it.” Nevertheless, Powell said the broader banking system is safe. He also said the Fed “is determined to “take a new look” on the issues raised by Trump regarding banking.
The hearing also made many political turns alongside lawmakers.
Powell’s remarks on monetary policy were largely in line with his recent statements and the statements of his colleagues who are digesting many of the financial and financial dynamics that create an uncertain environment.
Most notably, Trump, in a sense, leveled the economic playing field, and in another sense, implemented foreign policy goals against illegal immigration and drug smuggling, particularly fentanyl. has launched an aggressive campaign to enact the
Powell did not mention it in his prepared remarks, but was expected to face questions about tariffs and other issues from panel members.
In one exchange, he again stated that it is not the Fed’s policy or responsibility to be involved in trade policy.
“I think it still makes sense logically with the standard case for free trade. When there was one very large country that wasn’t actually playing in the rules, it didn’t work.” said Powell. “In any case, it is not the Fed’s job to create or comment on tariff policies. …It is for the elected people, not for us to comment. So that we can accomplish our mission. And monetary policy.”
The market interpreted the recent message as indicating that after cutting benchmark borrowing levels at full points in the second half of 2024, the Fed will likely be held up along with fees.
Powell said the current policy stance offers flexibility with a benchmark Fed fund ratio ranging from 4.25% to 4.5%. The Federal Open Market Committee introduced fees at its meeting in late January.
“We are paying attention to risks on both sides of our dual mission, and our policies are well positioned to address the risks and uncertainties we face,” he said. Ta.
Shortly after taking office, Trump said he would “require” interest rates “down soon.” However, later remarks stated that he agreed to a decision to maintain the fees in January, but Treasury Secretary Scott Bescent said the administration had more than the Fed’s actions to make a 10-year Treasury yield move. He said he is focusing on seeing it go down. Short-term rate.
Even if the Fed is cut, mortgage rates will be higher, and Powell said that it could change first.
“It’s true that mortgage rates are either high or remain high, but that doesn’t really have a direct connection to the Fed rate,” Powell said. “It really relates to the long-term bond rates, especially the Ministry of Finance, the Ministry of Finance, the Ministry of Finance, the Ministry of Finance, etc. These are high for reasons that are not particularly closely related to Fed policy.”
Powell said mortgage rates could drop as the Fed keeps rates low, but he said he is confident that this could happen when.
