Federal Reserve (Fed) Chairman Jerome Powell expressed that there is no need to rush interest rate cuts. Powell began his presentation of the semi-annual Monetary Policy Report to the US Congress. Speaking at a hearing of the Senate Banking, Housing, and Urban Affairs Committee on the first day of the presentation, Powell noted that the US economy is generally strong and has made significant progress in line with the bank’s goals over the past 2 years. Powell underlined that labor market conditions have cooled but remain robust, inflation is close to the long-term 2% target but still slightly elevated. Reminding that the Federal Open Market Committee (FOMC) has reduced the policy rate by 100 basis points since September last year, Powell stated that adjusting the policy stance in this way is appropriate considering the progress made in lowering inflation and the cooling labor market, continuing with reducing securities holdings. Powell said, “We do not need to rush to adjust our policy stance due to the economy being significantly less restrictive compared to before and continuing to remain strong.” Emphasizing that they will assess the scope and timing of additional adjustments to the policy rate based on incoming data, evolving outlook, and risk balance, Powell continued, “As the economy evolves, we will adjust our policy stance to best support our maximum employment and price stability goals. If the economy continues to remain robust and inflation does not continue to sustainably decline towards 2%, we can maintain our policy restraint for a longer period. If the labor market unexpectedly weakens or inflation falls faster than expected, we can adjust the policy accordingly. We are mindful of the risks to both sides of our dual mandate and are in a good position to deal with the risks and uncertainties we face.” Powell highlighted that the bank has carried out the second periodic review of this year regarding its monetary policy strategy, tools, and communications, focusing on the FOMC’s Long-Run Goals and Monetary Policy Strategy Statement and policy communication tools. Powell said that the Committee’s 2% long-term inflation target will be maintained and will not be the focus of the review. Regarding the implementation of tariff policies, Powell responded to senators’ questions after the presentation. He reiterated his previous comments on countries that implement free trade grow faster and stated that making tariff policy or commenting on it is not the Fed’s job. Powell stressed that their duty is to try to react to this reasonably and to devise monetary policy, saying, “It is not wise to speculate on something we do not know about.” Responding to a question about whether high tariffs could lead to higher costs, Powell expressed that this could be a possible outcome depending on various unseen factors. Powell pointed out that mortgage interest rates remain high as it is related to long-term bond yields not the Fed’s policy rate, saying, “These can remain high and continue to be high for reasons that are not closely related to the Fed’s policy for monetary policy.” He mentioned that even if mortgage rates lowered when the policy rate is lowered, housing shortages will continue in many places. Powell indicated that the increase in housing prices is related to the rise in wages, materials, and land costs. Emphasizing that the Fed cannot control long-term bond yields, Powell said that many factors affect these rates. He stated that one of these is the future short-term interest rate expectation of the Fed, adding that long-term inflation expectations, economic and fiscal risks, supply, and demand in the bond market are essential in determining these factors. Powell responded, “No,” to the question asked if the U.S. is in a recession. He expressed that he believes the neutral interest rate has risen from the very low levels before the pandemic and pointed out that most of his colleagues at the FOMC feel the same. He stated that he will not make a comment on fiscal policy except to say “that the U.S. federal budget is on an unsustainable path,” mentioning that it is not the debt but the path that is unsustainable, and it is essential to start working on it in the short term rather than the long term. Powell mentioned that they support efforts to create a regulatory framework for stablecoins and stated that if Elon Musk or the Government Accountability Office team tried to access Fed’s protected data and systems within their knowledge, he said, “I don’t think so.” Powell expressed that if such an attempt were made, he would report it to Congress.