Inflation Lurking? Powell Gives Clue in Sintra
Federal Reserve Chairman Jerome Powell said that the impact of import tariffs on U.S. prices will likely begin to show up in inflation data this summer. In a panel discussion with global central bank leaders at the European Central Bank Forum in Sintra, Portugal, Powell said that the Fed is closely monitoring the developments and is prepared to adjust policy if necessary.
Although inflation has not yet shown a significant spike, Powell stressed that uncertainty remains high. He explained that the impact of tariffs could come sooner, later, be greater, or even less than expected. Therefore, the central bank prefers to wait for clearer data before making its next interest rate decision.
The Fed is currently holding rates steady, despite pressure from President Trump to cut them soon. Powell emphasized that policy will be determined "meet by meeting," and did not rule out a rate cut in July, depending on how economic data develops.
Fed policymakers themselves are divided: most support at least two rate cuts this year, while others see no need for any cuts at all. Amid uncertainty over the direction of U.S. trade policy and little direct evidence of the impact of tariffs on inflation or the labor market, Powell stressed the importance of being cautious and data-driven.
Source: (ayu-newsmaker)
