During the second day of his testimony, Federal Reserve Chair Jerome Powell emphasized a cautious, data-driven approach to monetary policy, stating that the Fed is waiting for further developments in core inflation. He acknowledged that the recent weakening of the U.S. dollar reflects broader market uncertainty and noted that the impact of tariffs on inflation could be either higher or lower than expected. Powell warned that misjudging this factor could have long-term consequences, but clarified that stagflation is not the Fed's base case, though it remains a risk worth monitoring.
Powell also addressed financial markets and regulatory matters, stating that the bond market is functioning smoothly and that actions related to Basel III and the SLR rule are likely to be taken soon. He admitted that fiscal policy can influence inflation but reiterated that the Fed does not consider federal debt levels when making monetary policy decisions. The Senate committee's questions were strongly oriented toward rate cuts, with participants repeatedly suggesting Powell is the only one capable of reducing the high interest payments on U.S. public debt. Powell remained firm in his responses.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.
