The president of the Fed, Powell, says that the Central Bank should not ‘be in a hurry’ to reduce interest rates

President of the Federal Reserve Jerome Powell On Tuesday he reiterated the central bank’s commitment to reduce inflation and pointed out that political leaders are not in a hurry to reduce interest rates.

In the comments before the Senate Banking Committee, Powell described the “strong” economy with a “solid” laboratory and inflation that is relief but still above the 2% objective of the Fed.

With these prevailing conditions, he said that Fed does not need to move quickly to relieve monetary policy.

“With our policy position now significantly less restrictive than it had been and the economy that remains strong, we do not need to be in a hurry to adjust our policy position,” Powell said. “We know that reducing policy restriction too fast or too much could hinder progress in inflation. At the same time, reducing policy restriction too slowly or very little could improperly weaken economic activity and employment.”

Powell’s comments arrived in the First of two appearances This week in Capitol Hill. He talks to the Senate Banking Committee on Tuesday and then the Financial Services Committee of the House of Representatives on Wednesday.

Actions briefly submerged After his open statement, but he changed shortly after two hours of commerce.

Much of the procedure focused on bank supervision instead of monetary policy.

The ranking of Democratic Senator Elizabeth Warren of Massachusetts accused that the movement of President Donald Trump to stop the work of the consumer financial protection office left consumers without a guard dog of the largest banks in the country.

Warren asked Powell who manages consumer compliance outside the CFPB, to which he replied: “I cannot say that any other federal regulator.” However, Powell said the broader banking system is safe. He also pointed out that the Fed is “determined to take a look at the problems Trump has raised regarding the elimination of banking.

In monetary policy, Powell’s comments were largely in line with their recent statements and those of their colleagues, which are digesting a series of tax and monetary dynamics that create an uncertain environment.

More prominently, Triumph has launched an aggressive campaign to Tariff Institute Against the largest American business partners, in one sense to level the economic playing field and in another to enforce the objectives of foreign policy against illegal immigration and drug smuggling, specifically the fentanyl.

Powell did not mention any of that in his prepared comments, but he was expected to face the rates and other problems of the panel members.

In an exchange, he said again that it is not the policy or responsibility of the Fed to participate in commercial policy.

“I think the standard case for free trade and everything that logically still makes sense. It didn’t work so well when we have a very large country that does not really play with the rules,” Powell said. “In any case, it is not the work of the Fed to do or comment on the rates policy … that is for chosen people and it is not for us to comment. Ours is to try to react in a reflexive and sensible way and make it Monetary political so that we can achieve our mandate. “

The markets have interpreted recent messaging as indications that the Fed will be on hold with rates, probably in the summer, after reducing its reference loan level by a complete percentage point in the last part of 2024.

Powell said the current policy position, with the funds of the reference Fed in a range between 4.25%-4.5%, is providing flexibility. The Federal Open Market Committee kept the rate in place at its meeting at the end of January.

“We are attentive to the risks for both sides of our double mandate, and politics is well positioned to deal with the risks and uncertainties we face,” he said.

Shortly after assuming the position, Trump said “I would demand” that interest rates fall “immediately.” However, in subsequent comments, he said he agreed with the decision to keep the fees in his place, while Treasury Secretary Scott Besent said The administration is more focused on seeing than 10 -year treasure performance moves lower than Fed’s actions, which most strongly influences short -term rates.

The mortgage rates have remained high even when the Fed has reduced, and Powell said that could change in advance.

“It is true that the mortgage rates have gone or remained high, but that is not so directly related to the Fed rate,” Powell said. “It is really more related to long -term bond rates, particularly the Treasury, the 10 -year Treasury, the 30 -year Treasury, for example. And those are high for reasons not particularly related to the Fed policy.”

Powell said that mortgage rates could decrease since the Fed maintains low rates, although it is not sure when that could happen.