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Colby Smith reports that in his first remarks after stepping down as Fed chair, Jerome Powell stated that the central bank is facing a “stress test.”
Powell also warned that removing officials due to policy disagreements would undermine the credibility of the institution.
Core inflation has remained above target in recent months, with U.S. PCE inflation climbing to 3.8 percent in April, according to Colby Smith. Last month, the Senate confirmed Warsh as the new Fed chair, as inflation trended higher following renewed tensions in Iran. The policy backdrop has fueled attention on central bank leadership and credibility.