Federal Reserve Chair Powell: Focus on Inflation and Cybersecurity, Not Overreacting to Iran-Israel Conflict

On June 24th, Federal Reserve Chair Jerome Powell testified before Congress and maintained a careful stance on interest rate reductions. Powell persuaded many Fed officials to expect to begin cutting interest rates by the end of this year, but he emphasized that the inflation trajectory is heading upward, not downward, so he wants to "wait and see."

Powell reiterated that the Federal Reserve is not overreacting to geopolitical tensions but is simply deciding to pause interest rates based on inflation data. He said, "As long as the economy's strong, we can take a little bit of a pause here," contrasting the present outlook of the Iran-Israel conflict and the expectations of declining inflation.

Powell added that while inflation was forecasted to continue to come down, it's now forecasted to go up by all forecasters. "So and again, we're not overreacting," he said.

While the Chairman has indicated a rate cut for later in the year, Bitcoin has been trading at $105,506.28, up by 3.67% over the past day. The crypto markets seem to be positively reacting to the news.

On the GENIUS Act, Powell said he thinks it's a great thing that bills are moving and that the Federal Reserve needs a stablecoin framework on that particular issue. However, he didn't have a specific view to share at the time and said he could come back to it later.

Powell also told Congress that the central bank is paying attention to cybersecurity risks and working closely with other government agencies and banks to protect the American banking systems. He acknowledged that attacks on financial institutions are constantly evolving and that one "can never be comfortable" as "the bad guys are always getting better."

When asked about political pressure, name-calling, and "bullying" from the White House, Powell clarified that the Federal Reserve is an independent entity and stated that the Fed is only interested in providing the American people with a strong economy. "Anything else is a distraction," he said, emphasizing that the Fed is not a political organization.

In conclusion, Federal Reserve Chair Jerome Powell's careful stance on interest rate reductions and his focus on inflation data and cybersecurity risks show his commitment to maintaining a strong economy for the American people. The Fed Chair's testimony before Congress was a reminder of the importance of maintaining a stable and secure financial system in the face of evolving challenges.