Powell Testifies on Hill Amid Increasing Criticism

July 1, 2025

Fed Chair Jerome Powell testified before the House Financial Services Committee and the Senate Banking Committee last week, delivering the Semi-Annual Monetary Policy Report.

Why it matters: The hearings provided many opportunities for Democrats and Republicans to weigh in on the Fed’s interest rate policy and the White House’s push for lower rates. Of interest to CREFC members, Powell fielded a set of questions on CRE and private credit. 
 
  • Rep. Lisa McClain (R-MI) questioned Powell about potential financial instability “building beneath the surface” in sectors such as commercial real estate, private credit, and regional banking that could derail economic growth. 
  • Powell stated that there are “a lot of pots to watch to see that they don’t boil over,” pointing specifically to commercial real estate. He noted, however, that the Fed is actively managing the issue and emphasized that the situation is getting better, not worse. 
  • As for private credit, Powell acknowledged its “real, positive attributes,” but cautioned the sector has grown rapidly and has yet to face “a real downturn,” noting that it “bears close watching.”
What they’re saying: Powell told lawmakers that the central bank is “well-positioned to wait and learn more” about where the economy is headed before making any policy changes, noting that June and July inflation figures will be particularly important. 
 
  • Specifically, Powell said that ongoing uncertainty regarding the economic impact of elevated tariffs has led the Fed to maintain its current monetary policy stance, despite continued progress toward the 2% inflation target. 
  • Powell indicated that restrictive trade policies will lead to higher prices, noting that it's the Fed’s duty to ensure that a jump in prices does not lead to persistent inflation. 
  • On regulatory policy, Powell discussed proposed changes to the supplementary leverage ratio (SLR), the removal of reputational risk from bank examinations, and congressional efforts to advance stablecoin legislation. 
  • In addition to these regulatory changes, Chair Powell fielded questions from Senators on the national deficit and the economic implications of artificial intelligence.
  • As noted in the story above, shortly after the Senate hearing concluded, regulators released a joint proposal that would replace the current 2% eSLR buffer with a new capital charge, equal to one-half of each bank’s GSIB surcharge.

Contact David McCarthy (dmccarthy@crefc.org) or Sairah Burki (sburki@crefc.org) with any questions.   

Contact  

Sairah Burki
Managing Director,
Head of Regulatory Affairs and Sustainability
703.201.4294
sburki@crefc.org

David McCarthy
Managing Director,
Chief Lobbyist, Head of Legislative Affairs
202.448.0855
dmccarthy@crefc.org
Image of the Capitol Building
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2025 CRE Finance Council. All rights reserved.

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