Fed Chair Powell faces two days of Hill questions on plans to cool economy, avoid recession

The Federal Reserve chairman testifies before Congress twice a year. Powell first goes before the Senate, then to House on Wednesday.

Published: March 7, 2023 8:21am

Updated: March 7, 2023 8:45am

Federal Reserve Chairman Jerome Powell will testify Tuesday on Capitol Hill for the first time in the past nine months with expected testimony about the persistent indicators of an overheated U.S. economy and the Fed's likely plan to again raise interest rates. 

While inflation remains stubbornly high, the U.S. economy has not yet spiraled into a recession in early 2023, as some economists had forecast.

In the past year, the Fed has raised its benchmark interest rate at the fastest pace in four decades, to about 4.6%, also its highest level in 15 years, according to the Associated Press. The most recent increase was in January.

Some Fed officials recently indicated support for the raising the key rate above the 5.1% level projected in December, if growth and inflation remain high.

The Fed raising its key rate is intended to result in higher rates for mortgages, auto loans credit card and business lending, which would slow spending and inflation. However, high and/or continued hikes also increase the likelihood of inflation.

As part of a Fed chairman's semi-annual testimony before Congress, Powell will testify Tuesday before the Senate Banking Committee and Wednesday before the House Financial Services Committee, the wire service also reports.

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