July 09, 2024 at 10:04AM EDTas well as persistently high prices, Chair Jerome Powell said in testimony Tuesday, a shift in emphasis away from the Fed’s single-minded fight against inflation of the past two years that suggests it is moving closer to cutting interest rates.in four decades, Powell told the Senate Banking Committee.
The Fed chair is addressing the Senate panel on the first of two days of semi-annual testimony to Congress. On Wednesday, he will testify to the House Financial Services Committee. But on Tuesday, Powell said the job market has “cooled while remaining strong.” And he added that the economy’s growth has moderated after a strong expansion in the second half of last year. Last week, the government reported thatin June, though the unemployment rate rose for a third straight month to 4.1%.
Powell also told the senators that the Fed and other financial regulators will revamp a proposal from last year that would have significantly increased the amount of capital that banks would be required to hold to offset potential losses. The largest U.S. banks strenuously objected to the proposal. They argued that the stricter capital requirements would have forced them to reduce lending to consumers and businesses.