Some GOP senators criticized Powell, however, for characterizing tariffs as a potential driver of inflation. Sen. Pete Ricketts, a Republican from Nebraska, argued that the duties could simply act as a one-time increase in prices that wouldn’t fuel inflation.

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."

President Donald Trump said he has three or four people in mind to succeed Federal Reserve Chair Jerome Powell when his term expires next year.