Powell Expected to Defend Fed's Cautious Approach at Upcoming Testimony

rates, but with the market expecting only a small reduction this month. Powell is expected to defend the Fed's cautious approach and signal that any rate cuts will be done to sustain the economic expansion, not to respond to political pressure. While Trump has repeatedly criticized the Fed for not doing more to support the economy, his ability to influence appointments to the central bank may be limited. As Powell's term as chair expires in 2022, he may decide to stay at the helm until then, putting him in a position to oversee the Fed's response to any potential economic downturn. This is in line with his previous statements that he is "fully committed" to serving his full term. In the meantime, the Fed is facing pressure from both sides - with some calling for aggressive rate cuts to boost the economy and others warning against taking any action that could lead to inflation. Powell's testimony will be closely watched for any hints on the Fed's plans for future rate cuts and its assessment of the current economic situation. It is expected that the Fed will lower rates by a quarter point at its next meeting in July, but the market will be looking for any indications of future rate cuts. In the face of economic uncertainties and political pressure, Powell will likely continue to prioritize the Fed's mandate of maintaining stable prices and maximum employment. The upcoming testimony will provide valuable insight into the Fed's decision-making process and its stance on monetary policy."