Federal Reserve Chair Jerome Powell gave his semi-annual testimony to Congress on Tuesday. He highlighted the risks of reducing policy restraint too slowly, which could weaken economic growth and employment.
Jon Hilsenrath, senior adviser at StoneX, joins Brad Smith and Madison Mills on Wealth to react to Powell’s statements and the central bank chairman’s outlook on interest rates.
“The longer they [Fed officials] stay on hold… the fewer opportunities they have to cut rates later in the year. So, their decision to take a wait-and-see approach maybe lowers the odds a little bit for getting in the two rate cuts that they talked about in December for 2025,” Hilsenrath says. “But, it’s still really early days.”
Hilsenrath also points to the uncertainty surrounding inflation and economic policy, with Powell stating the Fed is in no hurry to adjust its monetary policy.
January’s Consumer Price Index (CPI) report “is really important because in the last few years, a lot of the big increases that we’ve seen in prices have happened early in the year,” Hilsenrath emphasizes, noting “that’s when companies are doing their resets.”
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