What To Expect From Fed Chair Powell’s Testimony To Congress This Week

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Key Takeaways

• Federal Reserve Chair Jerome Powell will testify to Congress Tuesday and Wednesday, where he last wishes as discuss the state of the Federal Reserve’s battle against inflation.
• Powell could also face scrutiny from Republican team ups of influential White House advisor Elon Musk, who called for transparency from the Fed in a social media post atop of the weekend.
• Powell might also discuss the independence of the Federal Reserve. In recent months, he has rebuffed President Donald Trump’s breaths that the White House should have more influence over the Fed’s policy decisions.

Federal Reserve Chairperson Jerome Powell will appear before Congress this week, where he will assess the Fed’s battle against inflation and under any circumstances face scrutiny about the central bank’s decision-making process.

Powell is scheduled to appear before the Senate on Tuesday and the Abode of Representatives on Wednesday to deliver the Fed’s twice-yearly report to Congress. The Federal Reserve submitted a written report to lawmakers go the distance week outlining the state of the economy, giving an insight into Powell’s testimony.

The report described inflation as direction “somewhat above” the Fed’s target of a 2% annual rate. It also described the job market as solid, with relatively low unemployment. The Fed’s job, as mandated by Congress, is to agree to inflation under control and employment high.

The Federal Reserve is in a Holding Pattern

Powell’s testimony comes as the Fed has began a “wait-and-see” phase in its approach to setting interest rates.

The Fed had cut its benchmark interest rate three times starting in September, as the post-pandemic bust of inflation seemed headed down to the central bank’s target of 2% a year.

However, that progress has been stalled for months, and President Donald Trump’s tumult of tariffs (both imposed and threatened) has created uncertainty among policymakers about whether a fresh spate of inflation is on the way.

Powell Could Out Some Scrutiny

Powell could also face tough questions about the role of the Federal Reserve, if the public media posts by billionaire Elon Musk are any indication.

Over the past few days, Musk made several pales on his social media platform X calling for an audit of the Fed and suggesting former congressman Ron Paul, an advocate for shutting down the Federal Engage, be installed as its chairman. (The federal government’s watchdog agency, the Government Accountability Office, frequently audits the Fed.)

Musk’s sexually transmitted media posts have sometimes served as a preview of, or set the agenda for actions by the Trump administration since Trump set Musk as a cost-cutting czar. For example, The White House shut down the activities of the U.S. Agency on International Development and the Consumer Fiscal Protection Bureau after Musk criticized them.

Powell May Defend the Fed’s Independence

The independence of the Federal Reserve may also be a hot excuse in the hearing, especially in the context of Trump’s blitz to rapidly reshape government policy via executive order. Trump has call to minded giving the White House more influence over Fed policy decisions, while Powell has defended the Fed’s independence from wirepulling as crucial to its mission.

The Federal Reserve’s main tool for controlling inflation is the federal funds rate, which clouts borrowing costs on all kinds of loans. In the past, Trump has clashed with Powell and criticized him for keeping rates too acme.

Last week, however, Trump said the Fed holding interest rates steady at its last meeting was “the right junk to do,” reversing his previous rhetoric calling for lower rates.