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Fed Chair Jerome Powell Shows Little Urgency to Lower Rates

Published

10 months ago

February 11, 2025

Fed Chair Jerome Powell Shows Little Urgency to Lower Rates

Jerome H. Powell, chair of the Federal Reserve, signaled little urgency to lower interest rates with the economy sturdy and inflation still too high in a hearing with lawmakers on Tuesday.

Mr. Powell, who testified before the Senate Banking Committee, confronts an economic and political landscape that is far different from what it was when he last appeared before Congress in July. The Fed has paused its rate-cutting plans with inflation still above its target, and questions are swirling about how it will navigate the economic and institutional ramifications of tariffs and other policies that President Trump has put at the center of his presidency.

“We do not need to be in a hurry to adjust our policy stance,” Mr. Powell told lawmakers.

The semiannual hearings, which will continue on Wednesday before the House Financial Services Committee, follow the Fed’s move into a new phase in its yearslong effort to tame price pressures. After lowering rates by a full percentage point last year, the Fed is in a holding pattern as it assesses how quickly to release its grip on the economy and ease borrowing costs.

Mr. Powell emphasized that conditions across the labor market “remain solid and appear to have stabilized.” That has given the central bank latitude to be patient about its next steps, especially since progress toward its 2 percent inflation goal has recently been bumpy.

“If the economy remains strong, and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer,” Mr. Powell said. “If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

The incoming inflation data has been slightly more reassuring, with price gains finally moderating in key sectors like housing. But sweeping proposals put forward by Mr. Trump that would affect immigration, tariffs and taxes have made the Fed’s job much more difficult.

The Fed, during Mr. Trump’s first trade war, did not respond to what it generally perceived as a one-off jump in prices stemming from tariffs. Instead, central bankers focused on souring business sentiment and a pullback in global demand, prompting it to lower rates in 2019 to shore up the economy.

The Fed could follow that same playbook this time. But much will depend on whether consumer and business expectations of future inflation remain in check. Because the backdrop is so different from 2018 — when inflation was too low — the fear is that Americans emerging from the worst shock to prices in decades will be more sensitive to additional increases.

Mr. Powell said the Fed’s job was not to comment on tariff policy, but to “try to react to it in a thoughtful, sensible way.” He later added that it would be “unwise to speculate” about the economic impact but said the Fed would be focused on the “net effect” of what Mr. Trump planned to pursue with regard to deportations, fiscal spending and taxes as well.

Already there are signs that people are bracing for higher inflation. Expectations about what will happen in the year ahead have risen sharply, according to a preliminary survey published by the University of Michigan on Friday.

Short-term metrics like that tend to bounce around a bit, so Fed officials focus on longer-term expectations. A new measure released by the Federal Reserve Bank of New York on Monday showed year-ahead inflation expectations steadying in January, while those over a five-year horizon rose slightly.

Mr. Powell expressed no concern on Tuesday about Americans’ expectations about future inflation and said that “policy is well positioned to deal with the risks and uncertainties that we face.”

The rules and regulations that govern Wall Street are also in focus for lawmakers, given the numerous changes since Mr. Powell last testified. The central bank has paused any “major rulemakings” after its top Wall Street cop, Michael Barr, decided a month ago to step down as vice chair for supervision. He said he was relinquishing that role, but not his Fed governorship, to avoid a lengthy legal battle with Mr. Trump that he feared could damage the Fed.

Mr. Barr had faced intense resistance from Wall Street and some of his own colleagues for seeking to impose stricter rules on big banks. He was eventually forced to scrap his initial proposal and issue a new one with significantly less onerous requirements. Mr. Powell said on Tuesday that the level of capital at the largest banks was “about right,” but acknowledged that having a global standard for regulations, known as “Basel III endgame,” was “good” for both U.S. banks and the economy.

Mr. Powell faced a number of questions from Republican senators about “debanking,” which refers to the closing of customer accounts for politically motivated reasons. The Fed chair said that he was “troubled by the quantity of these reports” and that it was “fair to take a fresh look” at the practice.

Mr. Powell confirmed that the Fed had removed language in a manual for its regional reserve banks regarding master accounts, which give financial companies access to the Fed’s payment systems. It had previously said reserve banks should “consider the conduct of the institution and its leadership” and the prospects of “undue reputational risks” before proceeding. One focal point was whether the institution engaged in “controversial commentary or activities.”

The Fed’s chair also came under fire for changes set to be made on the yearly stress tests it runs on the country’s largest banks to gauge their ability to withstand big economic and financial market shocks. Banking lobbyist groups sued the institution over the issue in December.

In a letter sent to Mr. Powell ahead of the hearings, Senator Elizabeth Warren of Massachusetts joined Representative Maxine Waters of California in calling on the Fed to resist making those changes or risk allowing banks to “game the stress tests” in a way that could ultimately undermine the stability of the financial system.

“The changes sought by big banks — like previous rollbacks of banking rules — will come back to haunt families, small businesses and the economy, increasing the likelihood of another Wall Street-driven economic collapse,” said the letter, which was seen by The New York Times.

Ms. Warren, the ranking Democrat on the Banking Committee, and Ms. Waters, who serves in a parallel role on the Financial Services Committee, also made the case that the banks’ legal arguments “do not have merit” and suggested that they would not hold up if the Fed would “vigorously defend its clear legality in court.”

The confrontation comes amid apprehension about how the Fed is handling directives from the White House. The central bank operates independently of the executive branch and prizes above all its ability to make decisions on interest rates without interference.

“We are concerned that, instead of fighting against the banks in courts and elsewhere, the Fed is now — in the wake of President Trump’s election — seeking new avenues for premature surrender,” Ms. Warren and Ms. Waters said in their letter to Mr. Powell.

The issue of policy independence reared up during Mr. Trump’s first term as he consistently attacked Mr. Powell for resisting his demands to lower interest rates speedily enough. He has been more circumspect so far in his second term, even saying the Fed’s decision to pause rate cuts in January “was the right thing to do.”

Asked about what he would do if Mr. Trump tried to remove a member of the Fed’s policymaking Board of Governors, Mr. Powell said, “It’s pretty clearly not allowed under the law.”

On issues apart from its policy independence, the Fed has shown a clear willingness to align with the White House when it deems it is appropriate and lawful. Most recently, the Fed voluntarily complied with Mr. Trump’s executive order to halt hiring. The Fed has also scaled back on its diversity, equity and inclusion programs as well as public initiatives related to climate change — areas the Trump administration has railed against.

Still, Mr. Trump’s imprint on the Fed so far pales next to what other agencies have experienced. The Consumer Financial Protection Bureau, the federal government’s financial industry watchdog, was effectively shut down over the weekend, with its acting director, Russell Vought, ordering employees to cease working.

Mr. Vought, who leads the Office of Management and Budget, also cut off the consumer bureau’s funding, which originates from requests to the Fed. The central bank last transferred $245 million in January to cover a portion of the agency’s 2025 budget of around $800 million.

Mr. Powell was pressed repeatedly by Democrats on Tuesday about the potential impact on consumers if the bureau ceases operations. He conceded that the Fed had limited jurisdiction and agreed that there would be a gap in terms of enforcement.

Mr. Powell was also asked about the Treasury Department’s payments system, which channels about 90 percent of the payments for the government and has been a source of concern after Elon Musk’s team recently gained access to it. Mr. Powell confirmed that the Fed’s sole role is to execute the payments directed by Treasury and that the central bank’s capacity to carry out those duties was “safe.”

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Business

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

Published

6 hours ago

December 19, 2025

Press Room

California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”

The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.

Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.

None of the 42 locations where the product was sold were in California.

Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.

“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”

The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.

The company recalled the following types of salad dressing:

Creamy Poblano Avocado Ranch Dressing and Dip
Ventura Caesar Dressing
Pepper Mill Regal Caesar Dressing
Pepper Mill Creamy Caesar Dressing
Caesar Dressing served at Costco Service Deli
Caesar Dressing served at Costco Food Court
Hidden Valley, Buttermilk Ranch

Business

They graduated from Stanford. Due to AI, they can’t find a job

Published

18 hours ago

December 19, 2025

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They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”

Business

Disney+ to be part of a streaming bundle in Middle East

Published

1 day ago

December 18, 2025

Press Room

Disney+ to be part of a streaming bundle in Middle East

Walt Disney Co. is expanding its presence in the Middle East, inking a deal with Saudi media conglomerate MBC Group and UAE firm Anghami to form a streaming bundle.

The bundle will allow customers in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE to access a trio of streaming services — Disney+; MBC Group’s Shahid, which carries Arabic originals, live sports and events; and Anghami’s OSN+, which carries Arabic productions as well as Hollywood content.

The trio bundle costs AED89.99 per month, which is the price of two of the streaming services.

“This deal reflects a shared ambition between Disney+, Shahid and the MBC Group to shape the future of entertainment in the Middle East, a region that is seeing dynamic growth in the sector,” Karl Holmes, senior vice president and general manager of Disney+ EMEA, said in a statement.

Disney has already indicated it plans to grow in the Middle East.

Earlier this year, the company announced it would be building a new theme park in Abu Dhabi in partnership with local firm Miral, which would provide the capital, construction resources and operational oversight. Under the terms of the agreement, Disney would oversee the parks’ design, license its intellectual property and provide “operational expertise,” as well as collect a royalty.

Disney executives said at the time that the decision to build in the Middle East was a way to reach new audiences who were too far from the company’s current hubs in the U.S., Europe and Asia.