Federal Reserve Chair Jerome Powell is kicking off his two-day testimony before the Senate Banking Committee, during which he will face questions about US monetary policy and inflation. Yahoo Finance Senior Reporter Jennifer Schonberger breaks down what to expect from the hearing and what Powell’s remarks may signal about the potential for interest rate cuts later this year.
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This post was written by Melanie Riehl
Video Transcript
First fed chair Jay Powell, semi annual testimony before the Senate Banking Committee getting underway as we speak.
Yahoo Finance Fed reporter Jennifer Schomer has the latest on that for us.
Hey Jen, good morning John, that JP appears to be inching closer to gaining the confidence needed to cut rates expected to say in a semi annual testimony before the Senate this morning that he’s encouraged with the latest cooler readings on inflation data and that more good data would strengthen his confidence.
I expected to say in prepared remarks that quote, the most recent inflation readings have shown some modest further progress and more good data would strengthen our confidence that inflation is moving sustainably toward 2%.
Now, how did reiterate that the fed will cut rates until officials have gained greater confidence that inflation is falling sustainably back towards 2%.
Pell noted that the Fed will continue to make decisions on monetary policy on a meeting by meeting basis.
He reiterated that lowering rates too quickly could reverse progress on bringing down inflation while keeping rates elevated for too long, could weaken the economy and the job market.
Republicans expected to press Powell on bank capital rules while Democrats are expected to pressure to lower rates.
Senate Banking Committee chair sharing Brown expected to say in opening remarks this morning that quote keeping rates too high for too long, the threatens workers paychecks while keeping other costs high, particularly housing housing prices and rents continue to go up perhaps in anticipation of that.
How expected to reiterate in his opening testimony that the fed is committed to bringing inflation back down to 2% and underscored that Congress has entrusted the Fed with operational independence to take a longer term view to meet the goals of maximum employment and price stability.
This hearing coming ahead of a fresh reading on inflation due out Thursday on the consumer price index and pricing in better than 70% chance that the FED could initiate its first rate cut concept timber the hearing kicking off right now in Washington where Powell will face more than two hours of questions from senators will see whether we get any more clues as to when the fed could lower rates.
All right, Jennifer, thank you so much for joining us on that.
We really appreciate it.
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