Federal Reserve Chair Jerome Powell on Wednesday defended the central bank’s reluctance to cut interest rates amid questions from Senate Republicans and a barrage of insults from President Trump.

During an appearance before the Senate Banking Committee, the Fed chair brushed off pressure from GOP senators and accusations of political bias from across Washington as he laid out the central bank’s concerns about the economic outlook.

Powell said that while he and his Fed colleagues are keeping an open mind about the potential impact of Trump’s tariffs, they felt it was unwise to cut rates and add more fuel to the economy before seeing the effects of the tariffs firsthand.

“If we make a mistake here, people will pay the cost for a long time,” Powell said.

Trump’s imposition of hundreds of billions of dollars in tariffs threw a wrench into the Fed’s efforts to bring interest rates down following the painful fight against postpandemic inflation.

After hiking interest rates to four-decade highs during the middle of the Biden administration, the Fed began cutting its baseline borrowing rate last year as inflation dropped sharply. While Fed officials expected those cuts to stretch through the first half of 2025, Trump’s stunning election victory and sweeping changes to trade policy prompted the Fed to reconsider.

The Fed’s pause infuriated Trump, who elevated Powell to the Fed chairmanship in 2017 and then spent the following eight years ruing the decision. The bank’s decision to keep rates steady at a range of 4.25 to 4.5 percent last week fueled even more attacks from Trump and top administration officials.

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