Federal Reserve Chair Jerome Powell Testifies Before Senate Banking Panel Amid Tariff and Rate Cut Debates
Washington, D.C., June 27, 2025 — Federal Reserve Chair Jerome Powell delivered his semiannual monetary policy testimony before the Senate Banking, Housing, and Urban Affairs Committee on June 25, 2025, addressing critical issues like inflation, interest rates, and the economic impact of President Donald Trump’s proposed tariffs. The testimony, part of the Humphrey-Hawkins Act mandate, followed Powell’s appearance before the House Financial Services Committee on June 24. While live streams of the event were available via outlets like CNBC and PBS News, recordings and transcripts remain accessible for those seeking to review his remarks.
Key Points from Powell’s Testimony
Inflation and Tariff Concerns
Powell emphasized that the Federal Reserve is “well positioned to wait” on interest rate decisions, citing uncertainty over Trump’s tariffs, set to take effect by July 9 unless trade deals are secured. He warned that these tariffs, potentially costing hundreds of billions annually, could drive inflation above the Fed’s 2% target, projected at 3.1% for 2025. “Some of that cost is going to fall on the consumer,” Powell noted, highlighting the risk of tariffs triggering either a temporary price spike or persistent inflation.
GOP senators, including Pete Ricketts (R-Nebraska) and Bernie Moreno (R-Ohio), challenged Powell’s stance, arguing tariffs might cause a one-time price increase rather than sustained inflation. Moreno accused Powell of political bias, saying, “You should consider whether you’re looking at this through a fiscal or political lens.” Powell countered that the Fed’s focus remains on delivering a stable economy, dismissing Trump’s rate cut demands as a “distraction.”
Interest Rate Outlook
The Fed has held its key rate at 4.25%-4.50% since December 2024, with Powell indicating no cuts until at least July, pending clearer inflation data. However, Fed governors Michelle Bowman and Christopher Waller, both Trump appointees, suggested a possible July cut, creating tension within the Fed. Traders now expect 64 basis points of cuts in 2025, up from 46 last week, per Reuters. Powell stressed the Fed’s data-driven approach, stating, “We want to be more confident inflation is moving sustainably toward 2% before loosening policy.”
Trump’s Influence and Fed Independence
Trump’s repeated attacks on Powell, calling him a “numbskull” and signaling plans to replace him by May 2026, loomed large. Powell asserted that Trump’s demands have “no impact” on policy, emphasizing the Fed’s independence. However, posts on X, like @DemocraticWins’ claim that Powell blamed Trump for economic slowdown, reflect polarized sentiment, though such assertions lack direct evidence from his testimony. The Supreme Court’s 2024 immunity ruling may bolster Trump’s authority, but it’s unclear if he can legally remove Powell.
Accessing the Testimony
Live coverage of Powell’s June 25 testimony was broadcast by CNBC, PBS News, and the Senate Banking Committee’s website, with replays available on C-SPAN and FederalReserve.gov. The Senate Banking Committee’s official page offers a transcript and archived video, accessible at www.banking.senate.gov. To watch, visit:
- CNBC: Search “Powell Senate testimony June 2025” for archived streams.
- PBS News: Check www.pbs.org for recorded coverage.
- Federal Reserve: View at www.federalreserve.gov under “News & Events.”
Context and Broader Implications
Powell’s testimony comes amid economic uncertainty, with the U.S. economy contracting 0.5% in Q1 2025 and the dollar index hitting a 3.5-year low at 97.378. His cautious stance reflects fears that tariffs could exacerbate inflation, while a potential trade deal with China, discussed in London on June 23, may ease pressures. Posts on X, like @kirkelliottphd’s, highlight market hopes for rate cuts, but Powell’s focus on data underscores caution.
What This Means
Powell’s testimony signals a Fed poised to balance inflation control with economic growth, resisting political pressure from Trump. For readers, accessing the testimony offers insight into the Fed’s strategy as tariffs loom. Publishers should monitor the July 28-29 FOMC meeting and trade talk outcomes for rate cut signals. The debate over Fed independence and tariff impacts will shape market sentiment, with Powell’s remarks a critical guide for navigating 2025’s economic landscape.
