The Federal Reserve Chair, Jerome Powell, stated that the US central bank is not in a rush to lower interest rates during his testimony before lawmakers on Tuesday. Powell emphasized that the current policy stance is less restrictive and the economy remains strong, indicating no immediate need for policy adjustments.
However, Senator Elizabeth Warren of Massachusetts expressed disapproval of Powell's approach, accusing the central bank of engaging in political maneuvers as the Trump administration implements significant government restructuring and regulatory reductions. Warren criticized the Fed for maintaining interest rates in the recent meeting and urged for a prompt reduction, starting with a substantial rate cut next month.
Warren highlighted various actions by the Fed, such as removing references to diversity, equity, and inclusion from its website post the Trump administration's inauguration, pulling out from an international central banking group focused on climate risk, and imposing a hiring freeze at the central bank. She cautioned that while the Fed's strategy might have short-term political benefits, it would ultimately be unsuccessful.
Powell's testimony forms part of the semiannual monetary policy report presented to the Senate Banking Committee. The Fed chief's stance on interest rates and the ongoing debate with lawmakers underscore the complex interplay between monetary policy, economic indicators, and political considerations in shaping the country's financial landscape.
