1/2/2024 0 Comments Share syn![]() ![]() Barr has said that he believes higher requirements may be necessary for some mid-sized institutions, along with other changes to bank supervision. ![]() REUTERS/Leah Millisįed Vice Chair for supervision, Michael Barr, is the Fed official overseeing a so-called holistic review of capital requirements. When asked by Senator Scott how much is too much when it comes to higher capital requirements, Powell acknowledged that there's a tradeoff between ensuring more stability and the impact on lending, which is something the Fed will carefully consider. “The more capital we put on the sidelines, the less capital there is for us to see our financial institutions loaning the money out.” “I do not believe that increasing significantly the capital standards is in the best interest of small businesses or people looking for loans,” Republican Ranking Member, Senator Tim Scott (R-S.C.) said. Some Republican committee members expressed concern that higher capital requirements for banks being contemplated by the Fed would restrict lending, unfairly punish smaller community banks, and perhaps even slow the economy, echoing comments made by House Republicans on Wednesday. “I mean the question is why should working families continue to bear the cost of fighting inflation? Why should they lose their jobs so that corporate profits can continue to balloon?” How much is too much? chair, what Fed governors call cooling down, regular people where I live, call them layoffs,” said Brown. Senate Banking Committee Chairman Sherrod Brown (D-Ohio) questioned why the Fed would maintain interest rates at the current level or consider raising rates again given the risk of causing job losses for more than a million and a half workers. “That's going to depend on how the, how the economy performs and inflation is just consistently proven more persistent than we've expected.”ĭemocrats voiced concerns that more interest rate hikes will hurt job growth and families. In fact, the Fed chair seemed to imply that perhaps a rate cut forecast for next year is a preliminary sketch and will depend on inflation coming down.įederal Reserve Chairman Jerome Powell. Powell said the Fed will need to be confident inflation is moving back to 2% before cutting rates and said he doesn’t see that happening any time soon. The interest rate projections released last week also showed a 2024 cut in rates by 100 basis points to 4.6%. We're trying to avoid the mistake of going too far and that's all it is.” “…As we get closer and closer to what we believe will be, it's uncertain, but we think our destination, we've slowed down a little further. ![]() “We're relatively close, we think to where we need to get,” said Powell. ![]() Powell told lawmakers Thursday that the point of the last policy meeting was to slow down the decision-making process after raising rates quickly last year. Three officials saw rates rising closer to 6%. That signaled rates could rise to as high as 5.6%, implying two additional rate hikes are likely this year. Powell's comments about rate hikes and inflation come roughly one week after the central bank decided to hold off raising rates at its last policy meeting while raising its rate forecasts for this year. ![]()
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