Berliner Tageblatt - US Fed chair says in no rush to tweak interest rate policy

With economic indices in a steady position, and only a slight uptick in inflation, the Fed recently voted to pause rate cuts, holding its key short-term lending rate at between 4.25 and 4.50 percent -- still above its long-term target of two percent.

"With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance," Powell told senators at a congressional hearing.

"We know that reducing policy restraint too fast or too much could hinder progress on inflation," he said. "At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment."

The Fed's short-term federal funds rate influences borrowing costs for consumers and businesses, affecting the cost of everything from mortgages to car loans.

At the end of last year, Fed policymakers pared back the number of rate cuts they expect this year, with some citing concerns about trade uncertainty following President Donald Trump's election victory.

In light of that, some analysts now expect only one or two rate cuts this year.

Futures traders currently place a probability of just over 55 percent that the Fed will make no more than one quarter-point cut this year, according to data from CME Group.

Financial markets overwhelmingly expect no change to interest rates at the Fed's next rate decision in March.

- Consumer protection void -

Meanwhile, Powell also warned that no federal regulator has stepped in to protect consumers from financial misconduct following the White House's recent decision to pause all non-essential work at the Consumer Financial Protection Bureau.

He told the Senate Banking Committee that there was currently "no other federal agency" doing the CFPB's regulatory job following the recent decision by Trump's administration to pause operations at the agency.

The CFPB was created in the wake of the 2008 global financial crisis, and serves as a watchdog over a variety of US consumer issues ranging from mortgages to credit cards and debt collection.

On Monday, Russell Vought, director of the White House Office of Management and Budget, told staff the CFPB was temporarily shuttering its headquarters and pausing all work, adding that employees should not show up.

"Please do not perform any work tasks," Vought wrote in an email to staff, adding that employees would need to seek written permission from him before doing any urgent work going forward, and should otherwise "stand down from performing any work task."

L.Dubois--BTB