📊 Summary of Powell's Testimony Before the House on 25/06
🟢 Fed keeps interest rates unchanged, continues to observe. Powell emphasizes that the Fed is “in a good position to wait and see how the economy unfolds” before adjusting policy. No commitment to cut rates in July despite pressure from Trump.
🟢 No clear signs for a cut yet. Powell states that inflation may rise again due to tariffs, but also acknowledges the possibility of weaker than expected inflation, which could prompt the Fed to cut rates sooner.
🟢 June data will be very important. Powell expects the impact of tariffs to begin showing from June, with the CPI report released on 15/07 being a crucial benchmark for assessment.
🟢 There is division within the Fed: Among the 19 FOMC members:
• 7 forecast no rate cuts by 2025,
• 2 support one cut,
• 10 forecast at least 2 cuts this year.
🟢 Some Fed officials signal a more dovish stance, such as Waller and Bowman (both appointed by Trump), stating that a cut in July is possible.
🟢 Current inflation is cooling down. Powell affirms that the U.S. economy is not in recession yet.
🟢 Tariffs remain the biggest variable. The Fed is concerned that this will cause inflation to rise again in the coming months, but it is too early to conclude.
🟢 The Fed does not consider public debt or politics. Powell reaffirms the independent role: “Our job is not to lower borrowing costs for the government.” The Fed relies solely on inflation and the labor market to make decisions.
🟢 Powell affirms that banks can serve customers in the crypto sector if safety is ensured, and the Fed will not interfere in customer selection.