Federal Reserve Chair Jerome Powell highlighted the impact of trade tariffs on inflation and made forecasts regarding economic measures.
Impact of Tariffs on Inflation
Powell noted that tariffs imposed by President Trump's administration are already affecting the U.S. economy and leading to rising inflation. He emphasized that consumers will ultimately bear the costs of these tariffs. According to him, "We are beginning to see some effects," indicating that inflation levels are rising and directly related to trade policy.
Unpredictability of Rate Changes
Despite the current rates being steady at 4.25% - 4.5%, Powell warned that inflation data is volatile and any future Fed policy decisions will depend on new data. He pointed out that even though rate cuts for 2025 are predicted, the situation may evolve.
U.S. Economic Stability
Powell stated that the U.S. economy remains strong despite various forecasts. "The U.S. economy has defied all kinds of forecasts for it to weaken," he remarked. Nonetheless, he acknowledged that inflation is expected to rise in the upcoming months due to the impact of tariffs.
Thus, Jerome Powell highlighted the significance of monetary policy and the impact of tariffs on inflation levels while leaving the future U.S. economic course open.
