'We do not need to be in a hurry': Powell reiterates cautious Fed rate stance with US lawmakers
Federal Reserve Chair Jerome Powell told lawmakers Tuesday that the Fed is not in a rush to adjust interest rates, reiterating a cautious stance as central bank policymakers digest signs of stubborn inflation and policy uncertainties from the new Trump administration.
"With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance," Powell said in his prepared testimony Tuesday before the Senate Banking Committee.
Powell this week is making his semiannual public appearance on Capitol Hill, facing the lawmakers who provide the basis of the Fed’s long-standing independence from the executive branch. He will testify before the House Financial Services Committee on Wednesday.
Powell is expected to face a raft of questions that could range from monetary policy and the effect of Donald Trump’s tariffs to the future of bank capital requirements and the actions of big lenders to "debank" certain customers.
The central bank held rates steady in the range of 4.25%-4.5% at its last policy meeting on Jan. 29 after cutting rates for three consecutive meetings at the end of 2024. Powell and other Fed policymakers have stressed that they plan to move slowly this year as they assess the path of inflation and the effect of Trump’s economic policies.
The president thus far has given Powell and the Fed some breathing room. After initially chiding the central bank on inflation, Trump said of the Jan. 29 decision that "I think holding the rates at this point was the right thing to do."
Read more: Fed rate decision: How it affects your bank accounts, loans, credit cards, and investments
Trump's Treasury secretary Scott Bessent offered even more assurances last week when he said that Trump is not asking the Fed to lower its short-term rates and is instead focused on bringing down longer-term borrowing costs by targeting the yield on the 10-year Treasury bond.
Not everyone is Trump's orbit is staying quiet about the Fed. Billionaire Elon Musk suggested in a series of social media posts this past weekend that the Fed should undergo closer scrutiny.
"All aspects of the government must be fully transparent and accountable to the people. No exceptions, including, if not especially, the Federal Reserve," posted Musk, who is roiling other parts of Washington as head of the Department of Government Efficiency (DOGE).
Musk has previously said that the Fed is "absurdly overstaffed."
Powell was asked about those comments at a January press conference and said, "You know, we run a very careful budget process. We’re fully aware that, you know, we owe the — we owe that to the public, and we believe we do that."
