Federal Reserve Chair Jerome Powell began his semiannual update to Congress on Tuesday by appearing before the Senate Banking Committee. He will appear before the House Financial Services Committee tomorrow.

Yahoo Finance’s Jennifer Schoenberger has the story:

Powell signaled that the central bank was getting closer to feeling comfortable about cutting interest rates, saying he was encouraged by evidence of cooling inflation and that more “good data” would point the Fed to where Will help get you there.

Inflation numbers “showed some modest further progress” after some tepid readings in the first quarter, he said in prepared testimony to US lawmakers on Tuesday, and more positive data bolstered our confidence. Inflation will be found to be moving steadily towards 2%.

This is the second time in the past week that Powell has offered optimism about the inflation picture. Last Tuesday he noted that the last two inflation readings for April and May “suggest that we are back on an inflationary path.”

FILE - Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington on June 12, 2024.  Powell testifies before the Senate Banking Committee on Tuesday, July 9, 2024.  (AP Photo/Susan Walsh, File)FILE - Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington on June 12, 2024.  Powell testifies before the Senate Banking Committee on Tuesday, July 9, 2024.  (AP Photo/Susan Walsh, File)

Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve on June 12, 2024 in Washington. (AP Photo/Susan Walsh, File) (Concerned Institution)

The next reading on consumer price index inflation is due on Thursday.

It is not expected to worsen inflation, but it is not expected to fall either. Based on “core” CPI — which excludes volatile food and energy prices that the Fed cannot control — inflation is expected to hold steady at 3.4% in June, up from the same level in May.

Powell noted in his prepared testimony that the Fed will continue to make decisions about monetary policy meeting by meeting. He reiterated that cutting rates too soon could reverse progress in bringing down inflation, while keeping rates high too long could weaken the economy and job market.

Democrats are expected to press Powell to cut rates sooner, while Republicans are likely to press Powell on bank capital rules and insist that rates not be cut closer to the November election. Must go.

Powell emphasized in his testimony that Congress has given the Fed the operational freedom it needs to take a “long-term perspective” in pursuit of its dual mandates of high employment and stable prices.



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