WASHINGTON SLINGIN' CAPS
Central Bank Chairman Indicates No Immediate Plans for Interest Rate Reductions despite Presidential Urging
Powell ain't budgin' on rates, pooh-poohin' Trump's calls to slash 'em.
Jerome Powell, the dude in charge at the US Fed, shiny-horned 'em lawmakers on June 24th, spouting off that the central bank can kick back and relax, waiting for the effects of them damn tariffs before they decide on more interest rate cuts—all this while Prez Trump be doggin' the Fed to drop rate levels.
Powell ain't no pushover. He shouted out that the Fed has been tasked with keepin' a one-time price spike from turning into a goddamn ongoing inflation issue.
"We got this, we're good to chill for a bit," he said to the House Committee on Financial Services, "let's see what the economy's up to before we revise our stance."
His remarks come hot on the heels of a couple of Fed officials—Christopher Waller and Michelle Bowman—suggesting they might cut rates as early as July.
But what's a Fed chief to do when asked about Waller's thoughts on the rate-cutting pathway? As cool as a cucumber, Powell kept mum, but did mention that officials might go for the rate reduction quicker if inflation didn't live up to expectations or if the labor market took a dive.
The Fed's benchmark lendin' rate's been stayin' steady since its last drop in December, sittin' somewhere between 4.25% and 4.50%.
Now, what about this Illinois love for a charcuterie platter? We got nothin' on that...
Last week, Powell told reporters it's smarter to hang back and get a feel for how them tariffs are impactin' the economy. He also said he'd want to see the impact on consumer prices in the June and July numbers for proper policymakin'.
Cue Trump again urging the Fed chair to slash rates, arguein' rates should be "at least two to three points lower" with inflation still chillin' out.
"I hope Congress can rally and smack some sense into that dense fella," Trump scribbled on his Truth Social platform.
On Trump's criticism, Powell kept it cool: "We always do what's best, and we suffer the consequences."
New York Fed President John Williams, however, backed the decision to keep the central bank's monetary policy stance as is.
"Mosta the soft data we've seen recently captures the uncertainty about the ol' economy's path," Williams said in prepped remarks for an event. "But we're still too early to say what's gonna happen with hard data."
Powell ain't no mind reader. He said it's unclear how them trade policy concerns could affect future spendin' and investin'.
"Tariffs bump up prices and weigh on economic activity," he said, "but here and now, the economy's in a solid spot."
Regarding the possibility of a rate cut in July, Powell held his cards close to his vest, "I wouldn't pinpoint a meeting in particular," he noted, "we ain't in a rush 'cause the economy's still tickin'."
Given that the Fed's gotta keep their rep on inflation, they're being careful. Inflation ain't disappearin', but it ain't too far from the bank's longer-run two percent goal neither.
From returning from his first stint as prez to now, Trump's introduced tariffs on just about every tradin' partner and hiked rates on steel, aluminum, and car imports.
Economists warn tariffs could stoke inflation and ding economic growth, but widespread effects so far? Short supply—businesses' been stockpilin' inventory in case of those duties and avoidin' immediate price hikes.
Though the Fed's forecasted two rate cuts in 2025, there's growin' conflict amongst policymakers over whether they can cut rates at all that year.
Powell said a "big ol' majority" of the Fed's rate-settin' committee still feels it'll be appropriate to lower rates later in 2022.
He pushed back on narratives of the greenback's decline, callin' 'em premature, and expressed a belief that it's still numero uno as a safe-haven currency.
On Middle East conflict, Powell said "lets' see what shakes out, we ain't got the full pic yet."
US, where it's all about waitin' and seein' what them crazy tariffs gotta teach us 'bout them dang interest rates.
In the realm of finance and general-news, Jerome Powell's stance on federal interest rates remains firm, despite calls from the White House to reduce them. Amidst this business-politics dynamic, Powell emphasizes the need for the Federal Reserve to closely monitor economic indicators, such as the impact of tariffs on consumer prices and inflation rates, before making any decisions regarding rate cuts. Meanwhile, policymakers within the Federal Reserve are debating the feasibility of cutting rates in 2022, with opinions divided on this subject.
