Federal Reserve Chairman Jerome Powell will appear before the Senate Banking Committee on Tuesday to begin his semiannual update to Congress. He is scheduled to appear before the House Financial Services Committee tomorrow.
Jennifer Schonberger of Yahoo Finance reports the story:
Powell suggested the central bank was getting closer to feeling comfortable about cutting rates, saying he was encouraged by evidence that inflation was declining and that more “good data” would help the Fed move in the direction it wants.
The inflation numbers showed “some modest further progress” after a somewhat higher reading in the first quarter, he said in prepared testimony before U.S. lawmakers Tuesday, adding that “more good data would strengthen our confidence that inflation is moving sustainably toward 2 percent.”
It’s the second time in the past week that Powell has sounded optimistic about the inflation picture. On Tuesday, he said the last two inflation numbers, for April and May, “suggested that we’re back on a disinflationary path.”
The next inflation figure, based on the consumer price index, is due out on Thursday.
Inflation is not expected to worsen, but it is not expected to fall either. Based on the “core” CPI, which excludes volatile food and energy prices beyond the Fed’s control, inflation is expected to stabilize at 3.4 percent in June, up from the same level in May.
Powell said in prepared testimony that the Fed will continue to make decisions on monetary policy as its meetings continue. He repeatedly stressed that lowering rates too quickly could reverse progress in lowering inflation, and keeping rates too high for too long could weaken the economy and the jobs market.
Democrats are expected to pressure Powell to cut rates soon, while Republicans are likely to pressure Powell to enforce bank capital rules and emphasize that rates should not be cut so close to the November election.
In his testimony, Powell emphasized that Congress has delegated to the Fed the operational independence it needs to take a “long-term view” in pursuing its dual mission of maximum employment and stable prices.
