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What did Powell say at the congressional hearing? He mentioned CPI, tariffs, Trump, Cryptos, and Musk's DOGE.
Powell stated that the CPI indicates the Federal Reserve is close to but has not yet achieved its inflation target, and the Fed will not be overly excited by the quality of one or two data points; he hinted that interest rates will remain high in the near term, saying, "hope to maintain a restrictive policy temporarily"; he mentioned "there's enough time to wait for" the restrictive monetary policy to take effect, "there are ways to continue to reduce the balance sheet", and reaffirmed that reserves are "adequate"; he stated that he would not resign even if Trump requested it; the Federal Reserve has not been cut off from access to the data needed for work, and DOGE's access to the payment system is very cautious; the establishment of the vice chair for financial supervision at the Federal Reserve has led to greater fluctuations in regulatory policy; the 2020 policy framework does not restrict the Fed's response to inflation.
Australian Consumers Take a Break From Spending -- Market Talk
Top economists: The Federal Reserve will pause interest rate cuts for a long time and should theoretically raise interest rates.
Economists state that the hot inflation data is not an "outlier" as it is consistent with other economic data performances.
After the USA CPI data unexpectedly "surged", the Federal Reserve's interest rate outlook changed dramatically!
Due to inflation in the USA exceeding expectations, traders in US Treasury bonds currently expect the Federal Reserve will only cut interest rates once in 2025, and have pushed back their estimate for the next Fed interest rate cut from mid-year to December. Prices of US Treasury bonds have plummeted, and yields on bonds of all maturities have risen by at least 8 basis points.
Australia Central Bank Rate Cut This Month Far From Certain -- Market Talk
Powell is both an ally of Trump and a scapegoat.
Powell's work in maintaining market confidence and independence is particularly outstanding; if Trump could recognize this and reconsider his plans for the Federal Reserve chair position, it would be beneficial for him.