In his Capitol Hill speech, Jerome Powell reiterated that the FOMC is comfortably waiting rather than rushing to cut Fed rates.
Fed Chair Jerome Powell is set to testify before Congress today, where the Fed chair plans to repeat the committee's wait-and-see approach to Fed rate cuts. The Fed chair will also point to Trump's tariffs and warn about how they put the economy at risk of rising inflation.
Jerome Powell reiterated no rush to cut Fed rates.
The Fed chair's proposed testimony to Congress suggests the Fed chair plans to continue to wait for clarity on inflationary pressures like the Trump tariffs before moving forward with rate cuts.
Jerome Powell said in a prepared statement that policy changes are ongoing and their impact on the economy remains uncertain.
The Fed Chair added that the impact of the $TRUMP tariffs will depend, among other things, on their ultimate level. "Expectations of this level, and thus the associated economic impact, peaked in April and have declined since then.
Nevertheless, tariff hikes this year are likely to weigh on rising prices and economic activity."
Jerome Powell’s Capitol Hill testimony is today, where he will give the speech before the House Financial Services Committee. The testimony comes just six days after the Fed’s decision to leave interest rates at 4.25% to 4.5%.
Fed Governor Christopher Waller had said that a Fed rate cut could come as early as July. However, Powell's testimony suggests that is unlikely even as traders continue to price in two rate cuts in the second half of this year.
Jerome Powell announced that he will continue to determine the appropriate stance of monetary policy based on incoming data, the emerging outlook and the balance of risks. Based on the speech, he noted that Trump tariffs could go either way, so they'll just have to wait and see what happens.
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