Powell Again Signals Fed is Prepared to Cut Interest Rates
WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell, testifying for a second day before Congress, is delivering the same message: that the central bank is prepared to cut interest rates to support the economy, raising hopes that the first reduction in its key policy rate in a decade could happen later this month.
Powell’s prepared testimony to the Senate Banking Committee on Thursday was identical to the remarks he delivered Wednesday before the House Financial Services Committee on Wednesday.
“Uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said in his opening comments.
Powell’s remarks on Wednesday sent stocks surging as investors believed the Fed chairman was sending his strongest signal yet that the Fed was ready to cut its policy rate, which currently stands in a range of 2.25-percent to 2.5-percent.
The Fed raised rates four times in 2018, drawing the ire of President Donald Trump, who has called the central bank clueless by pursuing needless rate hikes that have slowed economic growth and depressed stock gains.
Much of Trump’s criticism has focused on Powell, his choice as Fed chairman. The president has said he has the power to fire Powell or demote him, something that legal experts dispute.
Asked about Trump’s threats on Wednesday, Powell repeated what he has said before that he has a four-year term as chairman and intends to serve the full term.
Powell got support from lawmakers in the House and the Senate for his efforts to maintain the Fed’s independence from political pressure.
Sen. Richard Shelby, R-Alabama, told Powell on Thursday, “Thank you for keeping the Federal Reserve independent of both parties. We salute you for that.”
By AP reporter Martin Crustinger