Powell: U.S. economy strong, no rate cuts yet. Addresses tariffs, Musk rumors. Inflation at 3%, Fed may delay cuts.

Powell: U.S. economy strong, no rate cuts yet. Addresses tariffs, Musk rumors. Inflation at 3%, Fed may delay cuts.

On February 12, 2025, Federal Reserve Chair Jerome Powell testified before the U.S. House Financial Services Committee as part of the Fed’s semiannual monetary policy report. He emphasized that the U.S. economy remains strong, with a low unemployment rate of 4% and inflation still above the Fed’s 2% target. Powell stated that there is no urgent need to cut interest rates at this time.

Additionally, Powell addressed questions regarding President Trump’s tariff policies, reaffirming that the Fed is prepared to act cautiously if inflation rises further or if the labor market weakens. He stressed that, while the Fed is not responsible for tariff policies, it will respond appropriately to any changes that occur.

During his testimony, Powell was also questioned about Elon Musk’s team allegedly attempting to gain access to the Fed’s secure payment systems. Powell firmly stated that he does not believe Musk or his team has made any such attempts.

Powell’s testimony came as recent data showed that inflation in January increased by 3%, exceeding expectations. This has led the market to anticipate that the Fed may delay interest rate cuts until clearer signs emerge that inflationary pressures in the economy are easing.