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You are at:Home » Focusing on reducing inflation, not rushing to cut interest rates: Federal Reserve Chairman Powell – World News
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Focusing on reducing inflation, not rushing to cut interest rates: Federal Reserve Chairman Powell – World News

Adnan MaharBy Adnan MaharFebruary 11, 2025No Comments4 Mins Read0 Views
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Federal Reserve Chairman Jerome Powell reaffirmed the central bank’s focus on reducing inflation on Tuesday, stressing that policymakers are not in a hurry to lower interest rates.

Speaking before the Senate Banking Committee, Powell described the US economy as “strong overall”, highlighting “solid” labor markets and inflation, with easing the Fed’s 2% 2018 It’s exceeding your goal. Given these conditions, he showed that there is no immediate need to adjust monetary policy.

“Our policy stance is far less restrictive than ever and the economy remains strong, so there’s no need to rush to adjust our policy stance,” Powell said. “We know that policy suppression too quickly or too much can hinder inflation progress. At the same time, reducing or reducing policy suppression can unfairly weaken economic activity and employment. It’s sexual.”

Powell’s testimony marked the first of two appearances on Capitol Hill this week, with another session before the House Financial Services Committee scheduled for Wednesday. Monetary policy was an important topic, but much of the discussion revolved around bank oversight.

Sen. Elizabeth Warren, a Massachusetts Democrat, criticized former President Donald Trump’s decision to suspend work at the Consumer Financial Protection Agency, which vulnerable consumers to fraudulent conduct by major banks. He claimed he did it. When Warren asked Powell, who oversaw consumer compliance outside of the CFPB, he replied, “No other federal regulators can say it.” However, he insisted that the wider banking system would remain secure.

Regarding monetary policy, Powell’s remarks coincided with previous statements from Fed officials navigating the complex economic landscape. One of the key factors is Trump’s push to impose tariffs on the major US trading partners. It is a measurement aimed at addressing trade imbalances and enforcing diplomatic targets related to illegal immigration and fentanyl trafficking.

Powell did not mention the tariffs in his prepared remarks, but he was expected to face questions on the issue. He reiterated that fiscal policy decisions, including trade measures, are outside the Federal Reserve’s jurisdiction.

“I think the standard case of free trade and everything is logically still makes sense. When there was one very big country that wasn’t actually playing in the rules, it didn’t work.” Powell said. “In any case, it is not the Fed’s job to create or comment on tariff policies. It is for the elected people and cannot comment. We respond to it in a thoughtful and wise manner. , to develop monetary policy so that we can achieve our mission.”

Recent Fed signals have led a market that expects interest rates to remain the same until at least summer. This follows a complete percentage point reduction in the second half of 2024. Powell suggested that the current policy stance is set between 4.25% and 4.5%, providing flexibility. The Federal Open Market Committee did not change prices at its meeting in late January.

“We are paying attention to risks on both sides of our dual mission, and our policies are well positioned to address the risks and uncertainties we face,” he said. Ta.

Shortly after taking office, Trump called for immediate interest rate cuts, but later said he supported staying stable. Treasury Secretary Scott Bescent also suggested that the government is more interested in a 10-year decline in financial yields than the Fed’s short-term fee decision.

Despite the reduction in the Fed rate, mortgage rates remain high. This is a trend that Powell has been recognized but is attributable to long-term bond yields rather than central bank policies.

“It’s true that mortgage rates are either high or remain high, but that doesn’t really have a direct connection to the Fed rate,” Powell said. “It’s really related to long-term bonds, especially the Treasury Department, the 10-year Treasury Department, the 30-year-old Treasury Department, etc. And they’re high for reasons that aren’t particularly closely related to the Fed policy. .”

He added that mortgage rates could fall as the Fed keeps interest rates low, but he couldn’t predict when that could happen.



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Adnan Mahar
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Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.

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