Powell said when it comes to taking the interest on reserve power away, "there's an illusion that it would save money. That is not the case."

Federal Reserve Chair Jerome Powell said Wednesday that President Donald Trump’s sweeping tariffs will likely push up inflation in the coming months, even as some Republican senators suggested the chair was biased against the duties.

Federal Reserve Chair Jerome Powell said a proposal to eliminate the interest paid to banks that deposit cash at the central bank would not save money, and moving back to a scarce reserves regime would be challenging and risk volatility.