Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on March 18, 2026 in Washington, DC.
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Federal Reserve Chair Jerome Powell, in a wide-ranging talk at Harvard University, said Monday that he sees inflation expectations as grounded despite rising energy prices and no signs yet of a widespread crisis in private credit.
As his term leading the central bank nears an end, Powell avoided questions about the longer-term direction of interest rates or inclinations his designated successor has espoused.
In the near term, he said the proper move is to look beyond the short-term gyrations of the energy market and focus on the Fed’s goals of stable prices and low unemployment.
“Inflation expectations do appear to be well anchored beyond the short term, but nonetheless, it’s something we will eventually maybe face the question of what to do here,” he said during a question-and-answer question with a moderator and students. “We’re not really facing it yet, because we don’t know what the economic effects will be, but we’ll certainly be mindful of that broader context when we make that decision.”
As he has in the past, Powell said he believes the current rate target, in a range between 3.5%-3.75%, is “a good place” for the Fed to sit as it observes events currently playing out, including the Iran war and the impact tariffs are having on prices.
Powell’s term ends in mid-May, and President Donald Trump has nominated former Governor Kevin Warsh as the next chair. However, Warsh’s nomination is being held up in the Senate Banking Committee as U.S. Attorney Jeanine Pirro continues her investigation into renovations at Fed headquarters.
Though a judge threw out a subpoena Pirro’s office issued to Powell, she has appealed the decision. While the case is being adjudicated, Sen. Thom Tillis, R-N.C., has vowed to prevent the nomination from going through.
For his part, Warsh has stated a preference for lower interest rates than the current level. Asked to comment on his successor’s plans, Powell said, “I’m not going to swing at that pitch.”
Regarding private credit, Powell noted rising defaults, investor withdrawals and concerns about wider issues in the $3 trillion sector.
“I’m reluctant to say anything that suggests that we’re dismissive of the risk, but we’re looking for connections to the banking system and things that might result in contagion. We don’t see those right now,” he said. “What we see is a correction going on, and certainly there’ll be people losing money and things like that. But it doesn’t seem to have the makings of a broader systemic event.”
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