The chairman of the Federal Reserve Bank Jerome Powell testifies before the Committee for Financial Services at the Rayburn House Office Pudder on Capitol Hill on March 6, 2024 in Washington.
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Chairman of the Federal Reserve Jerome Powell On Tuesday, he repeated the commitment of the central bank in reducing inflation and signaled that decision -makers are not in a hurry to lower interest rates.
In the notes before the Senate Banking Committee, Powell called the economy “strong generally” with “solid” laboratory and inflation, which is mild, but still Above 2% of the Fed goal.
In the case of these conditions, he said that the Fed did not have to move quickly to alleviate the monetary policy.
“Because our political position is now much less restrictive than it was, and the economy remains strong, we don't have to hurry to adapt our political position,” said Powell. “We know that too quickly limiting politics or too much can make it difficult to progress in inflation. At the same time, it is too slow to limit a policy restriction or too little can weaken economic and employment. “
Powell's comments appeared in The first of two performances This week at Capitol Hill. On Tuesday, he speaks to the Senate Banking Commission, and then on Wednesday the House Financial Services Committee.
Briefly submerged inventory After its opening, but after two hours of trade it did not change much.
A significant part of the proceedings focused on bank supervision rather than monetary policy.
Democratic ranking Senator Elizabeth Warren of Massachusetts accused that the movement of President Donald Trump to stop the work of the consumer financial protection office left consumers without the supervisory body of the largest banks in the country.
Warren asked Powell, who manages consumers' compliance outside CFPB, to which he replied: “I cannot say any other federal regulator.” Powell said, however, that a wider banking system is safe. He also noticed that the Fed was “determined to look at the fresh problems that Trump raised in relation to the bank.
The interrogation also came many political turns, and the legislators
In terms of monetary policy, Powell's attention was largely in line with his recent statements and his colleagues who digest a number of fiscal and monetary dynamics, which constitute an uncertain environment.
The most visible, Asset started an aggressive campaign Institute's tariffs Contrary to the greatest American commercial partners, in a sense, to equalize economic drugs, and in others to enforce foreign policy goals against illegal immigration and drug smuggling, especially fentany.
Powell did not mention this in his prepared comments, but it was expected that they would stand before interrogation in the case of tariffs and other problems of panel members.
In one stock exchange he again noticed that commitment to trade policy is not a fed policy or an obligation.
“I think that the standard case of free trade and everything that still makes sense. It did not work so well when we have one very large country that does not really play the rules, “said Powell. “In any case, the Fed's task is not to do or comment on tariff policy. … it's for selected people and it is not commenting for us. Our attempt to respond to this in a caring, reasonable way and do a monetary policy so that we can achieve our mandate. “
Markets have interpreted the last messages as an indication that the FED will be suspended with the rates, probably in the summer, after lowering the level of comparative loans by a full percentage point in the second part 2024.
Powell said that the current political position, with the rate of FED funds in the range of reference in the range from 4.25%-4.5%ensures flexibility. Federal Committee Open Market he kept the stake in place at the late January meeting.
“We are considered the risk of both sides of our double mandate, and the politics is well prepared to deal with the risk and uncertainty with which we stand,” he said.
Shortly after taking office, Trump said he would “demand” that interest rates fall “immediately”. However, in subsequent comments he said that he agreed with the decision to maintain the rates, while Scott Bessent said the secretary of the treasury The administration focuses more on the fact that the 10-year treasury performance will increase than the Fed's actions, which affects short-term rates more strongly.
The rates of mortgage loans remained high, even when the Fed lowered, and Powell said that it could change forward.
“It is true that mortgage rates have dropped or remained high, but it is not so directly related to the Fed rate,” said Powell. “This is really more related to the long-term bond rates, especially the State Treasury, a 10-year treasure, for example a 30-year treasure. And they are high for unrelated reasons particularly closely related to the FED policy. “
Powell said that the mortgage rates may fall because the Fed maintains low rates, although it is not sure when it can.