Fed’s Powell heads to Congress with great data, but increasing uncertainty
Howard Schneider
WASHINGTON (Reuters) – Federal Reserve Chairman Jerome Powell will begin his two-day hearing at Capitol Hill on Tuesday. It’s still unfolding.
Powell appeared in one of his two testimonies before Congress last, so Donald Trump’s election was a succession of rounds of tariffs, a decline in immigration, and the number of available workers in the economy. It has reduced and increased the possibility of potentially widespread changes in financial sector surveillance.
Powell and other Fed officials are always careful to avoid judgments about the wisdom of administrative or parliamentary actions, focusing on how the economy will change as a result.
But given where the economy stands and the extent to which Trump thinks is intended, I hope the Fed premium will go slow for now and nothing will break.
“What we have now is a good labour market. Our economy is growing to 2-2.5%. Inflation has declined,” Powell said in a statement following the Federal Reserve’s January meeting. He spoke at a press conference.
But considering changes in trade, immigration, fiscal and regulatory policies, “probably lead to rising uncertainty,” Powell said, adding that Fed officials would be hoping to see how the economy will adapt in the coming months. He said he is poised to delay further interest rate cuts until it becomes clear.
“We don’t have to hurry to adjust our policy stance,” Powell said.
Powell will send that message to the Senate Banking Committee at 10am (1500 GMT) and to the House Financial Services Committee at 10am on Wednesday.
Both panels are now under Republican control, with new chairs. Powell has prioritized nearly seven years as chairman to develop a close relationship on Capitol Hill, but there is much to ask him about both parties’ senators.
Inflation is expected to decline and continue to do so. However, recent consumer surveys show that the public can be skeptical.
The possibility of sudden tariffs on close trading partners such as Mexico and Canada, as well as core industrial products such as steel and aluminum, has sparked debate over whether such import taxes cause general inflation. .
The administration has yet to develop detailed tax, expenditures or deregulation plans, but future negotiations on these issues could have a major impact on economic performance.