On February 11, Federal Reserve Chairman Powell will attend a hearing of the Senate Committee on Finance, Housing and Urban Affairs at 23:00 Beijing time today and deliver a semi-annual monetary policy testimony, and will deliver a semi-annual monetary policy testimony at the House Financial Services Committee at 23:00 Beijing time tomorrow.
As Powell delivers his semi-annual testimony, President Trump's proposals on trade, taxes, immigration and regulation have also brought uncertainty to the US economic outlook, complicating the Fed's efforts to lower inflation and maintain a healthy labor market. Pressure from Republicans has already led to changes at the Fed. Federal Reserve Vice Chairman for Supervision Michael Barr said last month that he would resign from his position as the Fed's top banking regulator, paving the way for Trump to appoint his own regulators from the other six governors.
The Fed has failed to achieve its 2% inflation target since 2021, and lawmakers may raise this target. Inflation continues to make it difficult for many Americans to afford their daily lives, which is a decisive issue in the 2024 presidential election and a concern for both parties. Sarah Binder, a senior fellow at the Brookings Institution in Washington, said the hearing would be "highly tense." Although the Fed tends to avoid partisan debates, "it cannot isolate itself" because it needs public support for its monetary and regulatory policies.
As for Trump, he criticized the Fed's recent decision to stand pat, but later said he might not intervene. On February 2, Trump said keeping interest rates stable was the "right thing to do." In an interview last week, new Treasury Secretary Yellen said of Powell: "I believe he will do the right thing, so there will be no criticism." (Jinshi)
