Fed Chair Jerome Powell Shows Little Urgency to Lower Rates

Jerome H. Powell, chair of the Federal Reserve, signaled little urgency to lower interest rates with the economy sturdy and inflation still too high in a hearing with lawmakers on Tuesday.

Mr. Powell, who testified before the Senate Banking Committee, confronts an economic and political landscape that is far different from what it was when he last appeared before Congress in July. The Fed has paused its rate-cutting plans with inflation still above its target, and questions are swirling about how it will navigate the economic and institutional ramifications of tariffs and other policies that President Trump has put at the center of his presidency.

“We do not need to be in a hurry to adjust our policy stance,” Mr. Powell told lawmakers.

The semiannual hearings, which will continue on Wednesday before the House Financial Services Committee, follow the Fed’s move into a new phase in its yearslong effort to tame price pressures. After lowering rates by a full percentage point last year, the Fed is in a holding pattern as it assesses how quickly to release its grip on the economy and ease borrowing costs.

Mr. Powell emphasized that conditions across the labor market “remain solid and appear to have stabilized.” That has given the central bank latitude to be patient about its next steps, especially since progress toward its 2 percent inflation goal has recently been bumpy.

“If the economy remains strong, and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer,” Mr. Powell said. “If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

The incoming inflation data has been slightly more reassuring, with price gains finally moderating in key sectors like housing. But sweeping proposals put forward by Mr. Trump that would affect immigration, tariffs and taxes have made the Fed’s job much more difficult.