The head of the Fed rejects political influences in decisions on interest rates

The head of the Federal Reserve, Jerome Powell, has made it clear that decisions on interest rates will not be influenced by political considerations, rejecting the idea that a possible rate cut in September could be seen as a strategic move before the November presidential elections in the United States. In a testimony before the House Financial Services Committee, Powell stated that the central bank's decisions will be based on economic data, outlook, and risks, without taking political factors into account. When asked if a rate cut in September could be viewed as a political move, Powell emphasized the independence of the Federal Reserve and stressed that decisions will be grounded and not swayed by electoral cycles. This statement is significant in a context where the state of the economy and the rising costs of housing and other products have been areas of concern. Rate cuts that had been anticipated earlier in the year were postponed due to inflation showing more strength than expected. Amid a debate on the Fed's monetary policy aligning with the election campaign, Powell has reiterated that decisions will be made based on the economy's evolution and grounded, without political considerations. During his testimonies before Congress, Powell has indicated that the Fed is nearing a decision on a rate cut, though he is not yet ready to say that inflation has been tamed. Despite encouraging data, the central bank aims to have more confidence in the direction of inflation towards its 2% target before reducing the cost of credit. Powell has emphasized that the Fed aims to maintain price stability and full employment, focusing on sustaining a path of sustainable growth. With unemployment at a level of 4.1% and inflation on the decline, Powell has deemed the current economic numbers as good, though he has noted that further progress is needed to achieve the Fed's objectives. The next Fed meeting is scheduled for late July, and it is expected that they will keep rates in their current range. However, a possible rate cut in September could be under consideration if inflation shows significant progress. Attention is focused on the upcoming inflation report, to be released soon, to assess the economic evolution and potential decisions of the Federal Reserve.