Federal Reserve Chair Jerome Powell addressed lawmakers, emphasizing the potential inflationary impact of tariffs and signaling a steady interest rate policy to mitigate risks.
Policy Stance and Tariff Effects
In his testimony before the House Financial Services Committee, Powell highlighted the Fed’s cautious approach, stating, “For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.” This stance contrasts sharply with President Trump’s calls for rate cuts, citing minimal tariff effects on consumer prices.
Price Stability and Inflation Concerns
Despite Trump’s pressure, Powell reiterated the Fed’s commitment to anchoring long-term inflation expectations and preventing price level spikes from evolving into persistent inflation issues. Powell underscored the importance of price stability in fostering sustained labor market strength for all Americans.
Future Outlook and Trade Policy Impact
While some Fed officials anticipate a rise in inflation later this year, Powell remains cautious about lowering rates due to concerns over trade policies potentially fueling inflation. Economic surveys reflecting apprehension regarding tariff repercussions further shape Powell’s stance on future monetary decisions.
Overall, Powell’s testimony reaffirms the Fed’s reluctance to hastily adjust interest rates, prioritizing economic stability and inflation management amidst evolving trade dynamics.
