In congressional testimony on Tuesday, Fed Chair Jerome Powell stood firm against President Trump’s calls for immediate interest rate cuts, stating the Federal Reserve is “well positioned to wait” before making policy changes.
Powell explained that the Fed expects tariffs to increase inflation in coming months, starting as early as June, and wants to observe these effects before adjusting rates.
Despite Trump’s harsh criticism calling Powell “dumb” and “hardheaded,” the Fed Chair received bipartisan support from committee members who praised his focus on the Fed’s core mission.
Powell indicated that rate cuts could come sooner if inflation proves weaker than expected or if unemployment rises sharply, but he declined to commit to any timeline, emphasizing the Fed’s independence from political pressure.