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Lawmakers on Capitol Hill are expected to ask the Fed chair about interest rates

STEVE INSKEEP, HOST:

Jerome Powell, the chairman of the Federal Reserve, has been taking questions from Congress - he gets a few more today - and has already talked about considerable progress on inflation, although he said he's not ready to declare victory. Here's NPR's Scott Horsley.

SCOTT HORSLEY, BYLINE: Inflation has fallen by about two-thirds since hitting a four-decade high two years ago, so Republican Senator Bill Hagerty of Tennessee had a question for the Fed Chairman - when will Powell and his colleagues be ready to start cutting interest rates?

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BILL HAGERTY: Are we weeks away, months away? Can you just...

JEROME POWELL: Yeah. I mean, I'm going to try to avoid sending any really specific signals about time today because it's going to depend on the data.

HORSLEY: Powell says the recent price data has been encouraging. Although inflation seemed to stall early this year at an uncomfortably high level, it resumed its downward trend in April and May. We'll get a reading on June's inflation rate tomorrow. Powell hopes that offers more signs that inflation is settling down towards the central bank's long-term target of 2%.

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POWELL: We've had one good and one very good inflation reading, and we need more good data so that we can be confident that what we're seeing is really - that's where inflation's going, that it's going back down toward 2%.

HORSLEY: Even if prices aren't climbing as fast as they had been, the cost of living is still higher than many people would like, and for some, the high interest rates the Fed's using to combat inflation only compound the pain. Democratic Senator Sherrod Brown of Ohio says those high rates make it more expensive to buy a house, or carry a balance on your credit card.

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SHERROD BROWN: Americans are frustrated. No, actually, Americans are pissed off.

HORSLEY: Brown tried to pin the blame for higher prices on greedy corporations, while Republicans, like South Carolina Senator Tim Scott, blame the president.

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TIM SCOTT: Joe Biden broke this economy, and it's been very difficult to fix it.

HORSLEY: Powell, who generally enjoys bipartisan support in Congress, tried to steer clear of the politics and focus on the Fed's own mission of promoting stable prices and maximum employment. Countries throughout the world were plagued by high inflation in the wake of the pandemic and Russia's invasion of Ukraine. Powell notes the recovery here in the U.S. has been one of the strongest anywhere.

Scott Horsley, NPR News, Washington.

(SOUNDBITE OF STAPES' "HASHIMOTO") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.