Federal Reserve Chair Jerome Powell is scheduled to testify before Congress on Tuesday, where he will likely face questions about interest rates, the Fed’s independence from politics, and the economic impact of the U.S. entry into the war between Israel and Iran.

Powell is scheduled to talk with the House Financial Services Committee about the Fed’s semi-annual report to Congress, which was released Friday. The report touched on the message Fed officials have been sending for months: the central bank is in “wait-and-see” mode regarding its benchmark interest rate.

It will be Powell’s first public appearance since last week, when the central bank’s policy committee decided to leave the influential federal funds rate at a range of 4.25% to 4.5%, the same level it’s been since December.

The fed funds rate influences borrowing costs on all kinds of loans, and lowering it could boost the economy. However, Powell and other Fed officials have been reluctant to do so because of the risk that President Donald Trump’s tariffs could stoke a fresh round of high inflation.

The Fed’s Wait-And-See Approach To Interest Rates

In the report, the Fed repeated its determination to see how tariffs impact the economy before possibly cutting rates.

The Fed is tasked with keeping inflation low and employment high. In recent government reports, inflation has been subsiding, nearly reaching the Fed’s goal of a 2% annual rate by some measures, while the unemployment rate has remained low by historic standards.

“The FOMC’s current stance of monetary policy leaves it well positioned to wait for more clarity on the outlook for inflation and economic activity and respond in a timely way to potential economic developments,” Fed officials said in the report. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”

The Fed’s Independence, And Trump’s Attacks

While economic conditions haven’t pressured the Fed to cut rates, the president of the United States has.

Last week, Trump escalated his demands for the Fed to lower interest rates, calling for the fed funds rate to be dropped to 1% or 2%, a dramatic cut that the Fed would typically only make to boost the economy during a recession. Trump also renewed his threats to fire Powell in an insult-filled post on social media.

The Federal Reserve is independent of direct control by the White House. The president can appoint officials to the Fed’s leadership committee and nominate its chairperson, but only when their terms of office expire. The Supreme Court recently reaffirmed the Fed’s special status among government agencies.

So far, Congress members from both parties have supported the Fed’s independence, with at least one Republican congressman proposing legislation that would reinforce the central bank’s independence.

How The Iran Attack Changes The Outlook

Powell will also have the chance to weigh in on how the U.S. bombing of Iran Saturday affects the outlook for inflation.

The entry of the U.S. into the war between Iran and Israel adds yet another risk to an already volatile economic equation. The war could disrupt oil supplies and push up gasoline prices, especially if Iran retaliates by closing off the crucial Strait of Hormuz to shipping.

On Friday, before the strikes, the Fed report noted that Israeli air raids on Iran this month had only driven up oil prices modestly.

“Oil spot prices jumped following Israel’s attack on Iran, while oil price futures beyond the near term rose by less, suggesting markets perceive more-limited risk of lasting disruptions to global oil supplies.”

As of Monday, oil futures were up 1.3% from the week before. However, if the conflict escalates and gas prices increase, consumers and the broader economy could feel the pinch.

“With tariff-induced price hikes already set to squeeze household spending power, higher gasoline prices would intensify the strain on consumer pockets, risking a more pronounced slowdown in the economy,” James Knightley, chief international economist at ING, wrote in a commentary. “Inflation may well push above 5% in such a scenario while private wage growth is rising only 3.5%.”