Federal Reserve Chair Jerome Powell testifies amid Trump attacks over interest rates

President Donald Trump wants the Federal Reserve to cut interest rates.
President Donald Trump wants the Federal Reserve to cut interest rates. Fed Chair Jerome Powell says that cannot happen yet.
Those two competing visions collided Tuesday as Powell defended the central bank's decision to stand pat since the start of the year, speaking during regularly scheduled testimony to the Republican-controlled House Financial Services Committee.
At issue is the state of the U.S. economy — and where it's heading. Recent data shows inflation has come down dramatically from the high rates seen during the Biden administration, while the unemployment rate has begun to creep higher.
In such a scenario, the Federal Reserve, which is charged by Congress with keeping both inflation and unemployment low, would tend to lower its benchmark interest rate to encourage more borrowing and increase economic activity, allowing more workers to be hired.
That's what Trump and others in his administration have wanted to see — and have repeatedly hammered Powell on his refusal to do so. The president resumed his campaign against Powell overnight Tuesday, doubling down in a social media post on his ongoing assertion that there was “no inflation” in the economy, which was otherwise doing “great.”
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