Jerome Powell Testifies on Economy, Inflation, Regulation

Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee, emphasizing the strength of the US economy and the current state of inflation, which is closer to the 2% target but still somewhat elevated.

During his testimony, Powell reiterated that the Fed does not need to rush to adjust monetary policy, citing the economy's resilience and the current inflation rate. He also addressed concerns about the impact of tariffs on inflation, which is a key area of interest for lawmakers. Powell's comments come as the Fed is reassessing its proposals on banking regulation, following the exit of Vice Chair for Supervision Michael Barr.

Powell also provided insight into the Fed's future plans, stating that the central bank will wrap up its framework review by late summer. This review will not include a focus on inflation targeting, and Powell emphasized that the Fed can maintain policy restraint for a longer period if the economy remains strong and inflation does not move towards 2%. Additionally, Powell noted that the US is not in recession and that the Fed is not in a hurry to make decisions.

The Federal Reserve Chair's testimony has significant implications for the US economy and banking regulation. As the Fed continues to monitor the economy and inflation, Powell's comments provide valuable insight into the central bank's approach to monetary policy and its plans for the future. Powell will also speak before the House Financial Services Committee on Wednesday, where he is expected to face further questions on his views on the economy and banking regulation.