Federal Reserve Chair Jerome Powell appeared before House lawmakers Tuesday to discuss the central bank's latest interest rate decision. The Fed kept rates unchanged for the fourth consecutive meeting despite pressure from President Trump. Powell plans to testify before the Senate Banking Committee Wednesday. He told representatives the Fed will study how Trump's tariffs affect inflation before making rate changes. The central bank wants more economic data before adjusting monetary policy.
Interest rates stay between 4.25 percent and 4.5 percent after the Federal Open Market Committee voted unanimously last week. Powell explained that inflation remains above the Fed's 2 percent goal. Trump's tariff policies will likely push consumer prices higher and hurt economic activity. The Fed chair said tariff effects could create a one-time price jump or cause lasting inflation. Officials cannot predict which outcome will occur.
Powell described the current economy as strong but cautioned against rushing policy decisions. The Fed must balance its goals of controlling inflation and maintaining full employment. Trump criticized the central bank for refusing to lower rates but later agreed with the decision. Consumer prices rose only 0.1 percent last month despite some tariff pressure. Markets show a 23 percent chance of rate cuts at the July meeting.
Fed Governors Michelle Bowman and Christopher Waller recently suggested they might support July rate reductions. Both officials want stable inflation data before making cuts. The Federal Open Market Committee cut rates three times before the November election but stopped after Trump won the presidency.
Interest rates stay between 4.25 percent and 4.5 percent after the Federal Open Market Committee voted unanimously last week. Powell explained that inflation remains above the Fed's 2 percent goal. Trump's tariff policies will likely push consumer prices higher and hurt economic activity. The Fed chair said tariff effects could create a one-time price jump or cause lasting inflation. Officials cannot predict which outcome will occur.
Powell described the current economy as strong but cautioned against rushing policy decisions. The Fed must balance its goals of controlling inflation and maintaining full employment. Trump criticized the central bank for refusing to lower rates but later agreed with the decision. Consumer prices rose only 0.1 percent last month despite some tariff pressure. Markets show a 23 percent chance of rate cuts at the July meeting.
Fed Governors Michelle Bowman and Christopher Waller recently suggested they might support July rate reductions. Both officials want stable inflation data before making cuts. The Federal Open Market Committee cut rates three times before the November election but stopped after Trump won the presidency.
