Jerome Powell Faces Scrutiny on Capitol Hill Amid Shifting Policies

Federal Reserve Chair Jerome Powell faces scrutiny this week as he testifies before Congress. Lawmakers from both parties will challenge Powell on President Trump’s policies, ranging from banking regulations to the reversal of diversity, equity, and inclusion (DEI) measures.

Uncertainty Surrounding Trump’s Proposals

The hearings occur amidst uncertainty over Trump’s proposals on trade, taxation, and immigration. These issues complicate the Fed’s efforts to control inflation and maintain a strong labor market. Republican pressure has led to significant shifts within the Fed, including the resignation of Michael Barr, the Fed’s Vice Chair of Supervision.

Fed Aligns with Trump’s Executive Order

The central bank has begun to align with Trump’s executive order halting DEI policies, removing relevant pages from its website. Lawmakers are expected to raise concerns over the Fed’s inability to meet its 2% inflation target, a pressing issue in the upcoming 2024 presidential election.

Lawmakers Question Powell on Post-Pandemic Policies

French Hill, Chairman of the House Financial Services Committee, expressed concern over the Fed’s post-pandemic policies. Sarah Binder from Brookings Institution predicts charged hearings, emphasizing the Fed’s need to secure public support for both monetary and supervisory policies.

Canada Considers Export Tariffs on Uranium and Oil if Trump Initiates Trade Conflict

Canada considers export tariffs is evaluating the imposition of export taxes on crucial commodities like uranium, oil…

Powell’s Relations with Lawmakers

Powell has worked to maintain strong relationships on Capitol Hill, particularly with Republican lawmakers. Despite Trump’s initial criticism of the Fed’s rate decisions, Powell has gained praise for his cautious approach. Powell will testify before both the Senate Banking Committee and House Financial Services Committee this week.

Democrats Question Tariffs and DEI Compliance

Some Democrats plan to question Powell on Trump’s tariff threats and the Fed’s compliance with Trump’s executive order on DEI practices. Maxine Waters, a leading Democrat, is pushing for the protection of diversity provisions under the Dodd-Frank Act, warning that Trump’s executive order cannot override federal anti-discrimination laws.

Republicans Test Powell on Deregulation

Republicans will press Powell on banking deregulation. They’ll question his stance on Trump’s proposals regarding bank supervision and “debanking.” Powell may delay addressing new regulatory issues until a vice chair is appointed. Lawmakers seek clarity on Powell’s position regarding these concerns.