Federal Reserve Chair Jerome Powell continued his Congressional testimony on Wednesday, addressing the Senate Banking Committee after warning the House panel that the Trump administration’s proposed tariffs could drive inflation higher. Powell stated that while inflation has recently been moderate, rising import taxes could begin impacting prices as soon as this summer. He emphasized that the Fed won’t move to cut interest rates until there’s clearer evidence of inflation trends, noting potential rate cuts if pressures remain contained. A July 9 deadline looms for broader tariffs, with uncertainty over how aggressive the administration will be. Though the Fed has held rates steady since December, internal divisions remain: 10 officials support two or more cuts this year, while 7 foresee none. Markets anticipate rate cuts in September and December.
