{"id":13033,"date":"2025-06-25T08:31:15","date_gmt":"2025-06-25T08:31:15","guid":{"rendered":"https:\/\/www.europesays.com\/us\/13033\/"},"modified":"2025-06-25T08:31:15","modified_gmt":"2025-06-25T08:31:15","slug":"powell-says-rate-cuts-can-wait-putting-fed-chair-in-conflict-with-trump","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/13033\/","title":{"rendered":"Powell says rate cuts can wait, putting Fed chair in conflict with Trump"},"content":{"rendered":"

WASHINGTON (AP) \u2014 The Federal Reserve will continue to wait and see how the economy evolves before deciding whether to reduce its key interest rate, Chair Jerome Powell said Tuesday, a stance directly at odds<\/a> with President Donald Trump\u2019s calls for immediate cuts. <\/p>\n

\u201cFor 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,\u201d Powell said in testimony Tuesday before the House Financial Services Committee. <\/p>\n

Several Republicans on the committee pushed Powell to consider reducing borrowing costs more quickly, as soon as its next meeting at the end of July. But on the whole, the hearing was uniformly polite and Powell did not face sharp criticism over the Fed\u2019s decision to leave its rate unchanged. <\/p>\n

Members of both parties thanked Powell for maintaining his focus on the Fed\u2019s dual mission of controlling inflation and supporting maximum employment. Powell has often cited his support in Congress as a bulwark against Trump\u2019s attacks<\/a>.<\/p>\n

Trump lashed out again early Tuesday, posting on his social media site: \u201cI hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come.\u201d<\/p>\n

Several Republicans asked Powell why the central bank has yet to lower borrowing costs. Powell responded that most economists, inside and outside the Fed, still expect tariffs to push inflation higher, and Fed policymakers want to see what happens over the next couple of months before making any changes. <\/p>\n

\u201cWe do expect tariff inflation to show up more,\u201d Powell said. \u201cWe really don\u2019t know how much of that\u2019s going to be passed through the consumer. We have to wait and see.\u201d<\/p>\n

Under questioning, Powell acknowledged that tariffs might not push up inflation as much as economists forecast. That, he said, could lead the Fed to reduce rates more quickly. A sharp rise in the unemployment rate could also spur the Fed to cut borrowing costs more quickly, he said. <\/p>\n

\u201cWe could see inflation come in not as strong as we expect,\u201d he said. \u201cAnd if that were the case, that would tend to suggest cutting sooner.\u201d But when asked specifically about July, Powell declined to comment.<\/p>\n

Powell also said he expected to see tariffs\u2019 impact on prices emerge in the next few months, starting in June. The June inflation report will be released July 15. <\/p>\n

Rep. Josh Gottheimer, a Democrat from New Jersey, asked Powell whether Trump\u2019s \u201cbullying\u201d would impact the Fed\u2019s decision-making. <\/p>\n

Powell said the Fed wants to \u201cdeliver a good economy for the benefit of the American people, and that\u2019s it.\u201d<\/p>\n

\u201cAnything else is kind of a distraction,\u201d Powell added. \u201cWe always do what we think is the right thing to do, and we live with the consequences. I don\u2019t know how else to do the job.\u201d<\/p>\n

The Fed\u2019s 19-member interest rate setting committee, led by the chair, decides whether to cut or raise borrowing costs. They typically increase rates to cool the economy to fight or prevent inflation, and lower rates when the economy is weak to boost borrowing and spending. <\/p>\n

The Fed\u2019s committee voted unanimously last week<\/a> to keep its key rate unchanged, though the Fed also released forecasts of future rate cuts that revealed emerging divisions among the policymakers. Seven projected no rate cuts at all this year, two just one, while 10 forecast at least two reductions. <\/p>\n

The Fed chair said the bump to inflation from tariffs could be temporary, or it could lead to a more persistent bout of inflation. <\/p>\n

The Fed\u2019s \u201cobligation,\u201d Powell said, \u201cis … to prevent a one-time increase in the price level from becoming an ongoing inflation problem.\u201d <\/p>\n

At a news conference last week, Powell suggested the Fed would monitor how the economy evolves over the summer in response to Trump\u2019s tariffs, hinting that a rate cut wouldn\u2019t occur until September. <\/p>\n

Yet two high-profile members<\/a> of the Fed\u2019s governing board, Michelle Bowman and Christopher Waller, have since suggested the central bank could cut its rate as early as July. Both officials were appointed by Trump during his first term and Waller is often mentioned as a potential replacement for Powell when his term ends next May. Powell was also appointed by Trump in late 2017. <\/p>\n

Other officials, however, are still cautious about rate reductions. Beth Hammack, president of the Federal Reserve\u2019s Cleveland branch, said Tuesday that given the uncertainty enveloping the economy, rates may be on hold for \u201cquite some time\u201d before the Fed decides to make \u201cvery modest cuts.\u201d <\/p>\n

Trump is urging the Fed to cut rates to save the U.S. government money on interest payments affixed to the vast national debt. Yet the Fed has long resisted consideration of the government\u2019s financing costs when making interest rate decisions, preferring instead to focus on the health of the economy and inflation..<\/p>\n

Waller, in an interview Friday, said that lowering the government\u2019s borrowing costs is \u201cnot our job\u201d and added that it was up to Congress and the White House to reduce the budget deficit. <\/p>\n

Trump meanwhile, on social media Tuesday repeated his false claim that the European Central Bank has cut its key rate ten times while the Fed has not cut at all. In fact, in the last 12 months the ECB has reduced its rate eight times and the Fed has done so three times, all late last year. <\/p>\n

The Fed\u2019s cuts last year lowered its rate to about 4.3%. Since then it has put reductions on pause out of concern that Trump\u2019s tariffs lead to inflation. The president has slapped a 10% duty on all imports, along with an additional 30% levy on goods from China, 50% on steel and aluminum, and 25% on autos. <\/p>\n

Yet inflation has steadily cooled<\/a> this year despite widespread concerns among economists about the impact of tariffs. The consumer price index ticked up just 0.1% from April to May, the government said last week, a sign that price pressures are muted. <\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 The Federal Reserve will continue to wait and see how the economy evolves before deciding…\n","protected":false},"author":3,"featured_media":13034,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[13792,13791,64,2309,13593,69,2239,12042,79,455,57,86,266,13790,13789,80,61,67,132,68],"class_list":{"0":"post-13033","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-ariel-atias","9":"tag-beth-hammack","10":"tag-business","11":"tag-christopher-waller","12":"tag-cleveland","13":"tag-donald-trump","14":"tag-economic-indicators","15":"tag-economic-policy","16":"tag-economy","17":"tag-federal-reserve-system","18":"tag-general-news","19":"tag-government-policy","20":"tag-inflation","21":"tag-international-trade","22":"tag-j-mascis","23":"tag-politics","24":"tag-u-s-news","25":"tag-united-states","26":"tag-unitedstates","27":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114743075527575606","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/13033","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=13033"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/13033\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/13034"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=13033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=13033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=13033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}