Feda Powell President says Central Bank is not in a rush ‘to further reduce interest rates

Federal reserves Jerome Powell On Tuesday, he repeated the dedication of the central bank to overthrow the inflation and signaled that politics donors were not in a hurry to push interest rates lower.

In remarks before the Senate Banking Committee, Powell called the economy “strong” with “solid” Labor market and inflation that is mitigating but still Above Fed’s goal of 2%.

With these conditions that prevailed, he said that the FED does not have to move quickly to facilitate monetary policy.

“Since our politics is now much less restrictive than it was and the economy that remained strong, we should not rush to adjust our policy attitude,” Powell said. “We know that a reduction in policy restrictions too fast or too much can interfere with inflation progress. At the same time, reducing policy restraint too slow or too little could be excessively weakening economic activity and employment.”

Powell comments arrived in First of two appearances This week on Capitol hill. It’s Tuesday Tuesday and the Financial Services Committee on Senate on Wednesday.

Stocks are briefly dipped After the open statement, but a little changed after two hours of trading.

Much of the procedure focused on the banking of the bank, not the monetary policy.

The ranking of Democratic Senators Elizabeth Warren of Massachusetts accused the transition of President Donald Trump stopped the work of the Consumer Protection Office, abandoned consumers without the keeper of the largest banks in the country.

Warren asked Powell, who managed to respect the consumer outside the CFPB, to which he replied, “I can’t say any other federal regulator.” Powell, however, said that the wider banking system was safe. He also noted that the Fed “determined to look freshly” the questions that Trump launched regarding de-banking.

In monetary politics, Powell’s remarks were generally in line with his recent statements and those of his colleagues, who digest a number of fiscal and monetary dynamics that creates an uncertain environment.

The most prominent, Trump launched an aggressive campaign for Institute tariffs Against the largest American shopping partners, in one sense that they equate an economic playground and in the other in order to implement foreign policy goals against illegal immigration and drug smuggling, especially fentanis.

Powell mentioned none of this in the prepared notes, but it was expected to face the examination of tariffs and other questions of the panel members.

In one exchange, he again noted that it was not a fed policy or a responsibility to engage in trade policy.

“I think the standard case for free trade and all that logically still makes sense. It failed so well when we have a very big country that is not really played by rules,” Powell said. “In any case, it is not the job of a Fed to do or comment on tariff politics … It is for the chosen people and it is not to comment on us. It is ours to try to respond to a thoughtful, reasonable way and make a monetary policy so we can achieve our term.”

The markets interpreted recent messages as an indication that the Fed would be led by prices, probably in the summer after reducing the level of reference values ​​by full percentage point in the second part of 2024.

Powell said that the current attitude of politics, with a reference rate of Fed Fund funds ranging between 4.25%-4.5%, provides flexibility. Open Market Federal Committee kept a rate on the spot at his late January meeting.

“We are careful about the risks on both sides of our double term, and politics is well positioned to deal with the risks and insecurities we face,” he said.

Shortly after taking over duty, Trump said he would “look for” These interest rates are dropped “immediately”. However, in later notes he said that he agreed with a decision to maintain prices, while Said the scott besent treasury secretary The administration is more focused on the fact that a 10-year-old treasury yield is moving lower than on Fed actions, which strongly affects short-term rates.

The mortgage rates were high even when the Fed reduced, and Powell said that could change.

“The truth is that the mortgage rates have gone or other high, but this is not so directly related to the Fed rate,” Powell said. “It is truly more related to the long-term bond rates, especially the treasury, for example, a 10-year treasury, a 30-year treasury. And they are high for reasons that are not particularly closely related to FED policy.”

Powell said that mortgage rates could be reduced because the Fed holds low, although he is not sure when this could happen.