Powell faces House pressure

The Hill

20 hours ago

The Big Story
Federal Reserve Chair Jerome Powell is in no hurry to lower interest rates despite months of pressure from President Trump, he told lawmakers Tuesday.
© Greg Nash
Testifying before the House Financial Services Committee on Tuesday, Powell stood by recent statements that the Fed will react to changes in the data as they come in, as opposed to following a predetermined path on monetary policy.
During testimony, Powell acknowledged that there was some disagreement about the path of rate reduction among members of the rate-setting committee.
'There's a significant minority that doesn't agree, but a significant majority feels that it will be appropriate to reduce rates later this year,' Powell said.
The Fed's most recent dot plot for 2025 interest rates, which shows the spread of different views among central bankers, shows that there are nine members of the committee who think that rates for this year should be between 4 and 4.5 percent while 10 members think they should be between 3.5 and 4 percent.
The federal funds rate was projected earlier this month to reach 3.9 percent this year — the same projection as in March — which would require two standard rate cuts of 0.25 percentage points.
''Too Late' Jerome Powell, of the Fed, will be in Congress today in order to explain, among other things, why he is refusing to lower the rate. Europe has had 10 cuts, we have had zero,' Trump wrote on social media Tuesday.
So far, tariffs from Trump's trade war have not made a significant impact on inflation. But Powell said Tuesday he expects inflation to increase over the summer.
The Hill's Tobias Burns has more here.
Welcome to The Hill's Business & Economy newsletter, I'm Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue.
Did someone forward you this newsletter? Subscribe here.
Essential Reads
Key business and economic news with implications this week and beyond:
Ford recalls 197,000 cars over issue that can trap passengers
Ford has recalled more than 197,000 Mustang Mach-Es because of an issue that can leave passengers trapped inside vehicles.
Anthropic wins ruling on AI training in copyright lawsuit but must face trial on pirated books
In a test case for the artificial intelligence industry, a federal judge has ruled that AI company Anthropic didn't break the law by training its chatbot Claude on millions of copyrighted books.
Hassett vows trade deals coming after GOP megabill passes
White House National Economic Council Director Kevin Hassett said Tuesday the administration is waiting to announce trade deals until after President Trump's megabill passes Congress, which the president is pressuring Republicans to do by the Fourth of July recess.
Tax Watch
House GOP moderates tell leadership they won't back Senate tax bill over Medicaid cuts
More than a dozen House Republicans warned they won't support the Senate's version of the tax and spending bill because the proposed Medicaid cuts are too steep.
Led by Rep. David Valadao (R-Calif.), 15 other vulnerable Republicans sent a letter to Senate Majority Leader John Thune (R-S.D.) and House Speaker Mike Johnson (R-La.) saying they support the Medicaid reforms in the House version of the legislation, but the Senate Finance Committee proposal went too far.
'Protecting Medicaid is essential for the vulnerable constituents we were elected to represent. Therefore, we cannot support a final bill that threatens access to coverage or jeopardizes the stability of our hospitals and providers,' the lawmakers wrote. 'The House's approach reflects a more pragmatic and compassionate standard, and we urge that it be retained in the final bill.'
The Senate Finance Committee draft seeks to clamp down on two tactics states use to boost Medicaid funding to hospitals: state-directed payments and Medicaid provider taxes. The restrictions are a major concern for rural hospitals, a key constituency for senators.
Republicans have set an ambitious July 4 deadline to pass the bill and send it to President Trump to be signed into law.
The Hill's Alexander Bolton has more here.
Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip
The Ticker
Upcoming news themes and events we're watching:
In Other News
Branch out with more stories from the day:
Systemic failures led to a door plug flying off a Boeing 737 Max, NTSB says
The heroic actions by the crew of Alaska Airlines flight 1282 ensured everyone survived last year …
Good to Know
Business and economic news we've flagged from other outlets:
What Others are Reading
Top stories on The Hill right now:
House torpedoes Rep. Al Green's effort to impeach Trump over Iran strikes
The House on Tuesday overwhelmingly torpedoed an effort by Rep. Al Green (D-Texas) to impeach President Trump over the U.S. strikes on Iran, underscoring how little appetite Democrats have to try and oust the president despite their frustration with the weekend attack. Read more
Democrat tells RFK Jr.: 'You lied to Sen. Cassidy'
Rep. Kim Schrier (D-Wash.) accused Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. of lying to Sen. Bill Cassidy (R-La.) when he told the senator he would maintain a key federal vaccine advisory committee 'without changes.' Read more
What People Think
Opinions related to business and economic issues submitted to The Hill:
You're all caught up. See you tomorrow!