In a recent Senate hearing, Federal Reserve Chair Jerome Powell stated that while inflation has improved since its peak two years ago, the Fed remains cautious about cutting interest rates until they are confident inflation is moving towards 2%. Powell emphasized the need for sustained progress in inflation, and the Fed’s focus on monitoring the job market. Powell highlighted that if the Fed waits too long to cut rates, it could undermine progress in job creation, balancing the risks of inflation and employment. Despite a resilient labor market, signs of weakening have appeared, with consumer spending showing cracks and retailers reporting weaker sales than expected. Powell also addressed proposed banking regulations, hinting at revisions, while Senator Elizabeth Warren pressed on implementing rules to restrain reckless behavior on Wall Street. Powell's testimony reflects the Fed's cautious approach in navigating economic challenges.