Federal Reserve Chairman Jerome Powell delivered the Monetary Policy Report and fielded questions from the House Financial Services Committee on Wednesday. Powell is scheduled to continue his semi-annual testimony before the Senate Banking Committee at 15:00 GMT on Thursday.
During Wednesday’s testimony, Powell emphasized that decisions regarding the policy rate reduction would hinge on incoming data, reiterating the Fed‘s stance of seeking greater confidence in sustainable inflation movement toward the 2% target before taking any action. Discussing the economic outlook, Powell asserted that there was no immediate indication of the economy being “in or facing a significant near-term risk of recession.”
The American session on Wednesday witnessed a decline in the benchmark 10-year US Treasury bond yield to 4.1%, leading to substantial losses for the US Dollar (USD) against major currencies. Market sentiment, as reflected in the CME FedWatch Tool, currently indicates an almost 90% probability of a rate cut in June.
Powell’s testimony before Congress sheds light on the central bank‘s cautious approach to monetary policy adjustments, emphasizing the importance of data-driven decisions and sustained confidence in inflationary trends. The evolving economic landscape remains a focal point for policymakers amid market speculation surrounding potential rate adjustments in the coming months.
