Federal Reserve Chair Jerome Powell Will Speak to the Senate Today
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Federal Reserve Chair Jerome Powell will appear before the Senate Banking Committee on Tuesday to deliver the Fed’s twice-yearly report on monetary policy.
The report was released last week and echoed recent comments from Fed officials in various public appearances. It noted the balancing act that the central bank’s policy committee faces as it attempts to control inflation. If the Fed gets monetary policy wrong, it could stoke inflation or cause a recession, which would be painful for everyday households.
Policymakers have kept the influential fed funds rate at a 23-year high, making mortgages, auto loans and other debt costlier in an attempt to discourage borrowing and spending. Fed officials are hoping those rates will push inflation down to a 2% annual rate from its current level of just under 3%.
Higher rates put more pressure on inflation by dragging down the economy. The risk of the strategy is that the economy could slow down too much and fall into a recession complete with mass layoffs—an outcome that’s so far been avoided, to the surprise of many economists.
Read more about what to expect from Powell here.