Powell says Jan inflation spike shows job not done
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The news: Federal Reserve Chair Jerome Powell told Congress that fresh inflation data showed that while the central bank has made substantial progress in taming inflation, it is not “there yet”.
“We are close but not there on inflation,” Powell told the House Financial Services Committee during his second day at the Capitol. "Today’s inflation print … says the same thing. Great progress, but we’re not quite there yet,” he said.
The context: Core consumer prices on Wednesday (Thursday AEDT) showed prices rose faster than expected in January, increasing 0.4%, the largest jump since March, with housing, food, energy, prescription drugs and car insurance driving the gains.
Powell said the Fed will keep policy restrictive for now. Following the inflation data, traders reduced expectations for rate cuts, now anticipating only one reduction this year instead of two.
Meanwhile, President Donald Trump in a post said “interest rates should be lowered”, saying they should go “hand in hand” with upcoming tariffs.
Powell declined to comment on the president’s call for lower rates but acknowledged new policies, including tariffs and fiscal measures, could influence Fed decisions, without expanding on what the effects could be.
What they said: “Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Lets Rock and Roll, America!!!,” Trump posted on his social media site.
The source: US House Financial Services Commitee
