Federal Reserve Chair Jay Powell testifies before the Senate Banking Committee this morning starting at 10 a.m. We expect this one to be more of a doozy than normal.
The early days of the Trump administration — combined with some of the Fed’s recent moves in response to it — have provided lawmakers with plenty to discuss with the central banker. We expect Powell to be asked about rate policy, Fed independence from Trump, the changing legal landscape of bank regulation, the fate of the Consumer Financial Protection Bureau and — of course — debanking.
Tensions in the nation’s capital are high, and that certainly includes anywhere in the general vicinity of the Federal Reserve. But Powell commands a distinct blend of sway, respect and rapport on the Hill. Whatever he says this week will get a lot of play, and much of Washington will be listening.
It helps that Powell is no stranger to the Hill, and he’s defined his approach to the job in part with frequent visits and calls with the nation’s top lawmakers. The last few weeks have been no exception.
We spotted Powell in the basement of the Dirksen Office Building a couple of days after his last press conference in January when the Federal Open Market Committee voted to hold interest rates steady.
Powell had a full calendar in December, too, meeting with officials like Sen. Mike Rounds (R-S.D.), Rep. Andy Barr (R-Ky.) and House Financial Services Committee Chair French Hill (R-Ark.). He also met with outgoing Sens. Jon Tester (D-Mont.) and Sherrod Brown (D-Ohio).
And Monday night, lawmakers including Sens. Jack Reed (D-R.I.) and Tina Smith (D-Minn.) said they’d met with Powell in recent days. Others said they’d spoken by phone.
“I think he’s done, frankly, a superb job,” Reed said. “Two years ago or more, everyone was saying, ‘Well, the question is how deep the recession’s going to be.’” For all the pain of inflation during the Biden years, lawmakers of both parties are grateful that unemployment didn’t spike as interest rates cranked upward.
But other lawmakers who’ve historically supported Powell, including Sen. Chris Van Hollen (D-Md.), made clear they’d have tougher questions for the Fed chair. Many Democrats and outside policy experts have pressing questions about what the Trump administration and DOGE may or may not be doing to the plumbing of the U.S. fiscal system.
“The Federal Reserve is the agent for actually making those payments,” Van Hollen said. “I may talk a little about that.”
We also expect scrutiny from Democrats over policy changes at the Fed that came shortly before and after Trump’s inauguration, like wiping a webpage with information about diversity and inclusion. “The Fed is not governed by these executive orders,” the Maryland Democrat said. “So I would hope that they will exercise some independence.
Most Senate Banking Republicans — if not all — are withholding direct criticism for now. We’ll note there has been some chatter from the MAGA-verse about replacing Powell with former lawmaker and noted central banking skeptic Ron Paul (Ky.).
“It’s one of the toughest jobs in Washington,” Sen. Bill Hagerty (R-Tenn.) said.
