Fed’s Powell to set election year stage with testimony on rate cuts, inflation

With asset values from stocks to crypto to homes piling higher, inflation still considered too high, and worries of “exuberance” creeping into the conversation, Federal Reserve Chair Jerome Powell on Wednesday will update U.S. lawmakers on the economy and prospects for interest rate cuts in a politically charged election year. The landscape he’ll lay out is in many ways encouraging, with the unemployment rate a low 3.7%, inflation by some measures within striking distance of the Fed’s 2% target, and the economy still growing despite the tight credit conditions imposed by the central bank. But the next steps remain uncertain, with recent inflation readings stickier than expected in key ways, and some Fed officials and outside analysts concerned the U.S. economy remains too strong for price pressures to fully recede – an argument for rate cuts to be delayed further than anticipated.