Federal Reserve Chairman Jerome Powell has signaled that he is taking a cautious approach to interest rates, saying he is in “wait-and-see” mode despite calls from lawmakers and President Trump for rate cuts.
Powell testified before Congress on Tuesday, where Democrats and Republicans expressed their desire for lower borrowing costs. However, the Fed chairman emphasized that his priority is understanding the economic impact of President Trump’s trade policy, particularly tariffs.
While Powell acknowledged the pressure to cut rates, he stated that the central bank will take a “pause” if the economy remains strong. The Fed has held interest rates steady since December, citing uncertainty about the potential effects on inflation and the labor market.
Notably, two top Fed officials appointed by Trump – Christopher Waller and Michelle Bowman – expressed support for rate cuts, possibly as soon as July. This marks a departure from the usual unified stance of the Board of Governors.
The divide between Democrats and Republicans on interest rates highlights the delicate balance between economic growth and inflation risks. The Fed has maintained that it will resist pressure for immediate rate cuts, citing concerns about fueling higher prices and a weaker job market in the near term.
With several senior Trump administration officials joining the push for lower interest rates, the tension around policy decisions is intensifying. However, Powell’s cautious approach suggests that the central bank remains committed to its long-term goals despite the pressure from Washington.
Source: https://www.axios.com/2025/06/24/powell-congress-rates-trump