Powell assures Americans bank accounts safe amid CFPB shutdown

Federal Reserve Chair Jerome Powell assured the Senate Banking Committee that Americans' bank accounts are safe and backed by government deposit insurance, despite the Trump administration's recent shutdown of the Consumer Financial Protection Bureau (CFPB). Powell faced criticism from Senator Elizabeth Warren, who expressed concern about the absence of oversight for large banks following the CFPB's closure. While inflation currently stands at 2.6%, Powell received little questioning about the Fed's interest-rate policies, which have raised borrowing costs but are credited with reducing inflation from a peak of 7.2% in June 2022. Senator John Kennedy praised the Fed's efforts and noted that the economy has continued to expand, contrary to predictions of a recession. Powell avoided discussing potential impacts of proposed tariffs on inflation and interest rates, indicating that the Fed is poised to monitor economic developments closely. The Fed’s key rate is currently around 4.3%, down from a recent high of 5.3%.