Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee, stating that the central bank is not in a rush to make further interest rate cuts. He highlights the strong job market and persistent inflation as key considerations. Powell also addresses President Trump's economic policies, bank supervision practices, and concerns raised about the Consumer Financial Protection Bureau's funding.
Federal Reserve chairman Jerome Powell testified before the Senate Banking Committee on Tuesday. He stated that the central bank does not need to rush into further interest rate cuts. Powell, in his semi-annual report to Congress, acknowledged that the Federal Reserve had already lowered its benchmark interest rate by a full percentage point last year. He explained that further cuts are likely to be delayed until inflation cools down or there is a significant softening in the job market.
Powell also addressed questions regarding President Trump's economic policies and bank supervision practices of the Federal Reserve. He emphasized his commitment to avoiding political entanglements. The Fed faces a substantial uncertainty: Trump's tariff policies could potentially exert further upward pressure on prices, making it more challenging for the central bank to lower interest rates. When questioned about the merits of the president's trade policy, Powell declined to comment, stating that it is a matter for Congress and the administration to resolve. He also addressed concerns raised by Republican senators about complaints that the Fed and other bank regulators had discouraged banks from working with certain businesses, particularly those in the cryptocurrency sector, which were perceived as politically unfavorable during the Biden administration. Powell acknowledged these complaints and assured the committee that the Fed would conduct a thorough review of its bank supervision manual.The committee also discussed the Consumer Financial Protection Bureau (CFPB), which was established to safeguard consumers in the financial system. Sen. Elizabeth Warren, a key proponent of the CFPB's creation after the Great Financial Crisis, expressed her outrage over the Trump administration's efforts to curtail its funding. Warren argued that the CFPB's existence was crucial to protecting consumers from financial exploitation, such as scams and unfair credit card practices. She urged Powell not to condone the administration's actions by allowing the CFPB to be starved of resources. The CFPB was designed to receive automatic funding from the Fed to prevent political interference in its operations
FEDERAL RESERVE JEROME POWELL INTEREST RATES INFLATION BANK SUPERVISION CONSUMER FINANCIAL PROTECTION BUREAU TARIFF POLICIES PRESIDENT TRUMP
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