Fed Holds Steady Amid Strong Economy and Slight Inflation Concerns

Federal Reserve Chair Jerome Powell emphasized patience on adjusting interest rates, citing a strong economy with low unemployment and persistent inflation. During a Senate hearing, Powell avoided commenting on Trump's tariff policies but acknowledged challenges. Markets showed slight fluctuations following his cautious remarks.

Federal Reserve Chair Jerome Powell has reiterated the Fed's cautious stance on interest rate changes, citing the overall strength of the U.S. economy, low unemployment rates, and inflation slightly above target levels.

In his opening remarks at a Senate Banking Committee hearing, Powell stated, 'The economy is strong overall and has made significant progress toward our goals over the past two years.' Powell highlighted the importance of not reducing policy restraint too quickly, as it might impede progress on controlling inflation.

While Powell did not address the Trump administration's tariff policies directly, he noted the existing trade challenges. Following his comments, the S&P 500 declined by 0.15%, and the yield on the benchmark U.S. 10-year note increased to 4.533%. Amid these developments, traders have shown a cautious response, waiting to see how policies will impact economic metrics.

(With inputs from agencies.)