The president of the Federal Reserve, Jerome Powell, has gone to the American Senate in one of his appearances in front of the Banking, Home and Urban Affairs Committee, to account for the Senators of the country on their policies. The signals on future types of types remain in the air after the appearance of Powell, who has maintained the same message he launched in January, at the Fed monetary policy meeting that took place at the end of the month. For Powell, it is necessary to see more signs of inflation fall to continue going down types, and although everything points in good direction, he insists that “they are not in a hurry” to continue with this process. As for Trump and the threats of interference in monetary policy by the new administration, Powell has seen, perhaps involuntarily, that there is a break in the Governing Council: some members of the Fed already include the tariff measures Trump in his macro economic forecasts, something that Powell considers “little wise.”
Powell’s appearance in the Senate has been used as an excuse by the country’s politicians to throw the headusing the visit of the president of the Fed as an excuse. As the main representative of the Republican Party, Senator Tim Scott has criticized the Fed for not avoiding assuming responsibilities of his mistakes, as happened, in his opinion, in the bankrupt In addition, that in recent years the agency has been biased in favor of the Democratic Party.
On the contrary, Democratic Senator Elizabeth Warren insists on criticizing deregulatory efforts by the new administration, and has asked Powell to avoid entering that game, since she considers that loosening the regulation to the banking sector will end badly for the American taxpayer.
Powell, on the other hand, has avoided entering the mud with politicians, and in his official speech he has focused on repeating the formula he already used at the end of January at the last monetary policy meeting of the Fed: there is no hurry to get off Interest rates, at a time when uncertainty is high, and despite the fact that inflation continues to give positive signs, and gradually converges with the objective of the Fed.
In Powell’s opinion “lowering the guys too much, or too fast, you can punish our progress with inflation. At the same time, not lowering them enough, or making it too slow, you can weaken economic activity and employment, “he insists, and thus illustrates the debate in which the Fed moves at this time, with a labor market that” is not Source of significant inflationary pressures, “he says.
Powell’s appearance in the Senate, however, has reflected a division that already exists within the institution, and has Donald Trump and his policies as protagonists.
The Fed Division: The impact of Trump’s policies
Among the questions of the senators that Powell had to answer, the president of the Fed has left a message that reflects how Trump, even unintentionally, has already divided the Federal Reserve Governing Council. It is not that there are supporters of the policies of the new president within the institution, nor detractors, but there is an important issue in which the members of the Fed are taking opposite paths: some members of the Fed are already taking into account the policies Economics that Trump is announcing, such as the tariff firm, while others believe that it is still premature to do so, since the scenario can change rapidly and prefer to wait to have a confirmation of how they affect these measures before assessing its impact.
In this sense, Powell has declared today that he is “little wise to speculate on tariff policies at this point”, A criticism, conscious or not, to those members who are already taking into account Trump’s policies when making macroeconomic forecasts.
It must be remembered that the US president has signed in recent days the imposition of tariffs to several countries, such as Canada, Mexico or even Spain, but these are laws that have one month of margin until they enter into force, and along the way Negotiations are being produced that have changed the content of these policies.
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