Powell: Fed in No Rush to Cut Interest Rates

Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank sees no urgent need to lower interest rates, emphasizing that the U.S. economy and monetary policy are currently in a strong position.

“We feel like we don’t need to be in a hurry to make any adjustments,” Powell said, highlighting that future decisions will be based on economic data. He added that while inflation progress is being closely monitored, any shifts in the labor market could influence policy changes.

“Right now, we feel like we are in a very good place,” Powell noted. “The policy is well-positioned, and the economy is in quite a good place.”

Powell Dismisses Trump’s Influence on Fed Decisions

Despite repeated criticisms from former President Donald Trump, Powell reaffirmed the Federal Reserve’s independence, pushing back against any political pressure.

Trump, who has previously clashed with Powell and even threatened to fire him, recently stated at the World Economic Forum that he would demand rate cuts if re-elected and after implementing his energy cost reduction plan. Powell, however, made it clear that the Fed operates independently of political agendas.

“As I’ve said countless times, we analyze data, assess economic risks, and use our tools to achieve our objectives,” Powell said. “That’s what we do. That’s what we’ve always done. Don’t expect us to do anything different.”

He reiterated that maintaining an independent central bank is crucial for achieving stable economic growth.

“That will give us the best possible chance to reach our goals for the benefit of the American people,” he said. “People should have confidence in that.”

Powell Responds to Musk’s Criticism of Fed Staffing

Tesla CEO Elon Musk, who is spearheading Trump’s government efficiency initiative to cut federal spending, recently called the Federal Reserve “absurdly overstaffed.” His remarks, posted on X, suggested that he views the Fed as a potential target for downsizing—an institution he has previously advocated abolishing.

In response to Musk’s comments, Powell defended the Fed’s budget management.

“We run a very careful budget process,” Powell said. “We’re fully aware that we owe that to the public, and we believe we do that. I’ve got no further comment than that.”

Fed Takes a Wait-and-See Approach on Trump’s Economic Policies

Powell also addressed the uncertainty surrounding Trump’s economic policies, stating that the Fed will remain cautious in its response until more details emerge.

“The committee is very much in the mode of waiting to see what policies are enacted,” Powell said, referring to Trump’s plans on tariffs, immigration, fiscal policy, and regulation.

“We don’t know what will happen with tariffs, with immigration, with fiscal policy, and with regulatory policy,” Powell explained. “We are only just beginning to see—and actually, we’re not seeing much yet. We need those policies to be clearly articulated before we can make a reasonable assessment of their economic impact.”

The Fed, he emphasized, will continue to monitor developments carefully but will not rush to react.

“We’re watching carefully,” Powell said, “but we won’t be in a hurry to respond until we see how it plays out.”