MNI: Powell Says Fed 'Well-Positioned' To Wait On Rate Moves

Federal Reserve officials can wait for more clarity on the economic impact of tariffs before making any decisions to alter the level of interest rates, Chair Jerome Powell will tell members of Congress Tuesday. 

"For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," Powell said in prepared testimony to the House Financial Services Committee that largely echoed his recent public comments. "Increases in tariffs this year are likely to push up prices and weigh on economic activity." (See MNI INTERVIEW: Fed Will Face 'Tough Calls' In H2-Holtz-Eakin) 

Powell said the economy is solid and unemployment is strong, showing little sign that he is in a hurry to lower borrowing costs.

Two Fed governors, Chris Waller and Michelle Bowman, said after last week's FOMC meeting they could support an interest rate cut as early as July after keeping rates on hold all year at 4.25%-4.5%. The June dot plot showed a fair amount of internal division regarding the path of rates this year and next.

Powell's comments also come against the backdrop of relentless pressure to cut interest rates from U.S. President Donald Trump. 

The Fed chair said the boost to price pressures from tariffs could be temporary, but it also has the potential to linger. 

"The FOMC’s obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem," he said. 

Powell's testimony before the U.S. House Financial Services Committee begins at 10 a.m. ET. He will speak before the Senate Banking Committee Wednesday.