As Trump Fumes, Powell Tells Lawmakers He's In No Rush To Lower Rates

Federal Reserve Chair Jerome Powell told lawmakers Tuesday that tariffs are likely to cause prices to climb and signaled the Fed is likely to hold interest rates steady to head off the threat of inflation.

“For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” he said in prepared testimony for the House Financial Services Committee, which is scheduled to convene at 10 a.m.

Powell’s position is increasingly at odds with that of President Donald Trump, who has repeatedly pressed the Fed chair to bring down borrowing costs amid signs that tariffs haven’t meaningfully affected consumer prices. Trump took to his social media platform, Truth Social, overnight to harangue Powell over rates, which have remained elevated even as other central banks move to bring them down.

"'Too Late' Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the Rate," Trump wrote. "I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come."

Many Fed officials still anticipate inflation will accelerate later this year, however. And Powell on Tuesday said the Fed’s “obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” according to his prepared testimony.

“Without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans,” he said.

Powell’s comments — delivered less than a week after Fed policymakers voted unanimously to hold rates at their current level of 4.25 percent to 4.5 percent — echo his other recent remarks suggesting he’s in no rush to bring down borrowing costs.

Two key members of the central bank’s rate-setting committee — Vice Chair for Supervision Michelle Bowman and Gov. Christopher Waller — recently suggested that they would be open to reducing borrowing costs as soon as next month. But Powell’s remarks indicate that he remains concerned about how trade policies may lead to higher inflation, particularly with a spate of economic surveys reflecting broad concern about the effect of tariffs.

“It remains to be seen how these developments might affect future spending and investment,” Powell said.