(US, 26th) Federal Reserve Chairman Jerome Powell said that the central bank is still working to assess the impact of tariffs on consumer prices.
Testifying before the Senate Banking Committee on Wednesday (June 25), Powell said: “The question is, who bears the cost of tariffs? What is the impact of tariffs on inflation? Frankly, these are very hard to predict in advance.”
This was Powell's second round of hearings on Capitol Hill this week. Fed policymakers face pressure from Trump to cut rates, and two Fed governors, Christopher Waller and Michelle Bowman, said that if inflation remains controlled, a rate cut could come as early as July.
However, on Tuesday, Powell reiterated that, given the strong economy and the still unclear effect of tariffs on inflation, officials do not need to rush to cut rates. He told the House Financial Services Committee that recent economic data are lagging indicators, and many economists expect inflation to rise “significantly” this year due to tariffs.
Powell also responded to a question from Committee Chairman Tim Scott regarding cost overruns in the renovation of two Federal Reserve buildings in downtown Washington. Scott and five other Republican committee members released a letter they sent to Powell before the hearing, asking about reports of the Fed's “lavish renovations” and concerns over the central bank’s “politicization.”
Powell did not deny that the project's costs have increased from the estimated $1.9 billion (8.037 billion ringgit) to $2.5 billion (10.5 billion ringgit), but noted that several media reports about the renovation materials and facilities were inaccurate.
He said: “There is no VIP restaurant, no new marble renovations, no special elevators—just a few old elevators, still there. There is no new water feature, no beehive, and no rooftop garden.”
Testifying before the Senate Banking Committee on Wednesday (June 25), Powell said: “The question is, who bears the cost of tariffs? What is the impact of tariffs on inflation? Frankly, these are very hard to predict in advance.”
This was Powell's second round of hearings on Capitol Hill this week. Fed policymakers face pressure from Trump to cut rates, and two Fed governors, Christopher Waller and Michelle Bowman, said that if inflation remains controlled, a rate cut could come as early as July.
However, on Tuesday, Powell reiterated that, given the strong economy and the still unclear effect of tariffs on inflation, officials do not need to rush to cut rates. He told the House Financial Services Committee that recent economic data are lagging indicators, and many economists expect inflation to rise “significantly” this year due to tariffs.
Powell also responded to a question from Committee Chairman Tim Scott regarding cost overruns in the renovation of two Federal Reserve buildings in downtown Washington. Scott and five other Republican committee members released a letter they sent to Powell before the hearing, asking about reports of the Fed's “lavish renovations” and concerns over the central bank’s “politicization.”
Powell did not deny that the project's costs have increased from the estimated $1.9 billion (8.037 billion ringgit) to $2.5 billion (10.5 billion ringgit), but noted that several media reports about the renovation materials and facilities were inaccurate.
He said: “There is no VIP restaurant, no new marble renovations, no special elevators—just a few old elevators, still there. There is no new water feature, no beehive, and no rooftop garden.”