In a recent statement, Jerome Powell, Chairman of the Fed, addressed the influence of tariffs on inflation in the U.S. and its implications for economic policy.
Impact of Tariffs on Prices
At the press conference on June 30, Powell noted that tariffs have become a significant topic of discussion, mentioned nearly 200 times, underscoring their importance for rising goods prices.
Expected Data and Its Significance
Forecasts from major banks and research firms suggest a moderate rise in inflation in July. The Fed must keep the impact of tariffs low if it considers lowering interest rates, as the effective tariff rate is currently over 17%.
Economic Forecasts and Implications
The released CPI figures showed a rate of 2.7%, while the Core CPI exceeded expectations at 3.1%. Powell stated, "For interest rate cuts to proceed, the tariff impact on inflation must remain contained."
Jerome Powell's remarks highlight the complex relationships between tariffs, inflation, and economic policy, continuing to cause volatility in financial markets.
