Latest news with #HouseFinancialServices
Daily Mail
3 days ago
- Business
- Daily Mail
Fed Chair Jerome Powell reveals why interest rates haven't been cut
Federal Reserve Chair Jerome Powell struck back at President Donald Trump on Tuesday, claiming his sweeping tariff plan is the main reason he has not lowered interest rates. 'Increases in tariffs this year are likely to push up prices and weigh on economic activity,' Powell told members of the House Financial Services Committee. 'For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' the Fed chair testified. Powell has served atop the Federal Reserve since 2018 and has long caught the ire of the president, who has recently nicknamed the banker 'Too Late' Powell for not yet lowering the cost of borrowing. 'We should be at least two to three points lower. Would save the USA 800 billion dollars per year, plus,' Trump said in a late-night social media post ripping Powell ahead of his hearing. The president also called on his GOP lieutenants in Congress to pummel Powell for refusing to lower interest rates. 'I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come.' Several Republican lawmakers took Trump's memo and pressed Powell on why the central bank has yet to lower interest rates this year. During a pointed questioning from Rep. Bill Huizenga, R-Mich., Powell continued to reiterate that Trump's tariffs have prompted uncertainty over rising inflation. 'The reason we're not is the forecast by all professional forecasters that I know of on the outside and the Fed do expect a meaningful increase in inflation over the course of this year,' he said. The central bank chairman also conceded that tariffs may not push inflation up to forecasted levels. In that case, the Fed would move to quickly reduce rates, Powell testified. A drastic increase in unemployment could also prompt the bank to lower borrowing costs, he said. 'Do you believe we are in a position where we may be able to cut rates in July?' Lawler asked. Powell responded: 'If it turns out that inflation pressures do remain contained, then we will get to a place where we cut rates sooner rather than later... I don't think we need to be in any rush,' he added.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Fed's Powell heads to Senate panel for second day of testimony
U.S. Federal Reserve Chair Jerome Powell resumes two days of Congressional testimony on Wednesday when he appears before the Senate Banking committee after scrutiny before a House panel the day before that focused on the Fed's concerns the Trump administration's tariff plans will raise inflation. The Senate session begins at 10 a.m. with Powell expected to deliver the same message he presented to the House Financial Services Committee that even with recent inflation more moderate than expected, the central bank expects rising import taxes will lead to higher inflation beginning this summer. He is also expected to reiterate that the Fed won't be comfortable cutting interest rates until it sees if prices do begin to rise and whether that process shows signs of becoming more persistent. 'We should start to see this over the summer, in the June number and the July we don't we are perfectly open to the idea that the pass-through (to consumers) will be less than we think, and if we do that will matter for policy,' Powell said on Tuesday. 'I think if it turns out that inflation pressures remain contained we will get to a place where we cut rates sooner than later...I do not want to point to a particular meeting. I don't think we need to be in any rush,' particularly given a still-strong labor market and so much uncertainty about the impact of the still-unresolved tariff debate. U.S. Federal Reserve should consider cutting rates as soon as July, governor says Tariffs have already risen on some goods, but there is a coming July 9 deadline for higher levies on a broad set of countries – with no certainty about whether the Trump administration will back down to a 10 per cent baseline tariff that analysts are using as a minimum, or impose something more aggressive. The Fed has held its benchmark interest rate steady in the 4.25 per cent to 4.5 per cent range since December, despite demands by President Donald Trump for immediate, and deep, rate cuts. Economic projections released by the Fed last week showed policymakers at the median do anticipate reducing the benchmark overnight rate half a percentage point by the end of the year. But within those projections is a clear divide between officials who take the inflation risk more seriously – seven of 19 policy makers see no rate cuts at all this year – and those who feel any tariff price shock will be less severe or quickly fade. Ten of the 19 see two or more rate reductions. Investors currently expect the Fed to cut rates at its September and December meetings, but hold rates steady at its next meeting on July 29-30.
Zawya
3 days ago
- Business
- Zawya
Fed's Powell heads to Senate panel for second day of testimony
U.S. Federal Reserve Chair Jerome Powell resumes two days of Congressional testimony on Wednesday when he appears before the Senate Banking committee after scrutiny before a House panel the day before that focused on the Fed's concerns the Trump administration's tariff plans will raise inflation. The Senate session begins at 10 a.m. with Powell expected to deliver the same message he presented to the House Financial Services Committee that even with recent inflation more moderate than expected, the central bank expects rising import taxes will lead to higher inflation beginning this summer. He is also expected to reiterate that the Fed won't be comfortable cutting interest rates until it sees if prices do begin to rise and whether that process shows signs of becoming more persistent. "We should start to see this over the summer, in the June number and the July we don't we are perfectly open to the idea that the pass-through (to consumers) will be less than we think, and if we do that will matter for policy," Powell said on Tuesday. 'I think if it turns out that inflation pressures remain contained we will get to a place where we cut rates sooner than later...I do not want to point to a particular meeting. I don't think we need to be in any rush," particularly given a still-strong labor market and so much uncertainty about the impact of the still-unresolved tariff debate. Tariffs have already risen on some goods, but there is a coming July 9 deadline for higher levies on a broad set of countries - with no certainty about whether the Trump administration will back down to a 10% baseline tariff that analysts are using as a minimum, or impose something more aggressive. The Fed has held its benchmark interest rate steady in the 4.25% to 4.5% range since December, despite demands by President Donald Trump for immediate, and deep, rate cuts. Economic projections released by the Fed last week showed policymakers at the median do anticipate reducing the benchmark overnight rate half a percentage point by the end of the year. But within those projections is a clear divide between officials who take the inflation risk more seriously -- 7 of 19 policy makers see no rate cuts at all this year -- and those who feel any tariff price shock will be less severe or quickly fade. Ten of the 19 see 2 or more rate reductions. Investors currently expect the Fed to cut rates at its September and December meetings, but hold rates steady at its next meeting on July 29-30. (Editing by Chizu Nomiyama)
Yahoo
3 days ago
- Business
- Yahoo
Fed's Powell heads to Senate panel for second day of testimony
By Howard Schneider WASHINGTON (Reuters) -U.S. Federal Reserve Chair Jerome Powell resumes two days of Congressional testimony on Wednesday when he appears before the Senate Banking committee after scrutiny before a House panel the day before that focused on the Fed's concerns the Trump administration's tariff plans will raise inflation. The Senate session begins at 10 a.m. with Powell expected to deliver the same message he presented to the House Financial Services Committee that even with recent inflation more moderate than expected, the central bank expects rising import taxes will lead to higher inflation beginning this summer. He is also expected to reiterate that the Fed won't be comfortable cutting interest rates until it sees if prices do begin to rise and whether that process shows signs of becoming more persistent. "We should start to see this over the summer, in the June number and the July we don't we are perfectly open to the idea that the pass-through (to consumers) will be less than we think, and if we do that will matter for policy," Powell said on Tuesday. 'I think if it turns out that inflation pressures remain contained we will get to a place where we cut rates sooner than later...I do not want to point to a particular meeting. I don't think we need to be in any rush," particularly given a still-strong labor market and so much uncertainty about the impact of the still-unresolved tariff debate. Tariffs have already risen on some goods, but there is a coming July 9 deadline for higher levies on a broad set of countries - with no certainty about whether the Trump administration will back down to a 10% baseline tariff that analysts are using as a minimum, or impose something more aggressive. The Fed has held its benchmark interest rate steady in the 4.25% to 4.5% range since December, despite demands by President Donald Trump for immediate, and deep, rate cuts. Economic projections released by the Fed last week showed policymakers at the median do anticipate reducing the benchmark overnight rate half a percentage point by the end of the year. But within those projections is a clear divide between officials who take the inflation risk more seriously -- 7 of 19 policy makers see no rate cuts at all this year -- and those who feel any tariff price shock will be less severe or quickly fade. Ten of the 19 see 2 or more rate reductions. Investors currently expect the Fed to cut rates at its September and December meetings, but hold rates steady at its next meeting on July 29-30. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
4 days ago
- Business
- Daily Mail
Fed Chair Jerome Powell sticks it to Trump as he reveals the BIG reason interest rates haven't been cut
Federal Reserve Chair Jerome Powell struck back at President Donald Trump on Tuesday, claiming his sweeping tariff plan is the main reason he has not lowered interest rates. 'Increases in tariffs this year are likely to push up prices and weigh on economic activity,' Powell told members of the House Financial Services Committee. 'For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' the Fed chair testified. Powell has served atop the Federal Reserve since 2018 and has long caught the ire of the president, who has recently nicknamed the banker 'Too Late' Powell for not yet lowering the cost of borrowing. 'We should be at least two to three points lower. Would save the USA 800 billion dollars per year, plus,' Trump said in a late-night social media post ripping Powell ahead of his hearing. The president also called on his GOP lieutenants in Congress to pummel Powell for refusing to lower interest rates. 'I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come.' Several Republican lawmakers took Trump's memo and pressed Powell on why the central bank has yet to lower interest rates this year. During a pointed questioning from Rep. Bill Huizenga, R-Mich., Powell continued to reiterate that Trump's tariffs have prompted uncertainty over rising inflation. 'The reason we're not is the forecast by all professional forecasters that I know of on the outside and the Fed do expect a meaningful increase in inflation over the course of this year,' he said. The central bank chairman also conceded that tariffs may not push inflation up to forecasted levels. In that case, the Fed would move to quickly reduce rates, Powell testified. A drastic increase in unemployment could also prompt the bank to lower borrowing costs, he said. 'We could see inflation come in not as strong as we expect,' he said. 'And if that were the case, that would tend to suggest cutting sooner.' Rep. Mike Lawler, R-N.Y., slammed the Fed chair for being too late in raising interest rates in 2021 when inflation from COVID-19 began to grip the nation. 'Do you believe we are in a position where we may be able to cut rates in July?' Lawler asked. Powell responded: 'If it turns out that inflation pressures do remain contained, then we will get to a place where we cut rates sooner rather than later... I don't think we need to be in any rush,' he added. The impact of Trump's tariffs are expected to show up in the June inflation report, the Fed chair said. However, the analysis won't be released until July 15. The 19-member Federal Reserve members unanimously voted against changing interest rates last week.
