On the 24th, U.S. Federal Reserve Chairman Jerome Powell stated that regarding monetary policy adjustments, the Fed will continue to take a wait-and-see approach, as it needs to better assess the impact of tariffs on inflation and future economic trends.
At a House Financial Services Committee hearing, he said that the effects of policy on the economy remain highly uncertain. Although the expected impact of tariffs peaked in April and then declined, this year's tariff increases will likely push up prices and put pressure on economic activity. The impact of tariffs on inflation may be temporary, or it may be more lasting, depending on the magnitude of the tariff effect and the time required for it to fully pass through to end-prices, among other factors.
He said that the responsibility of the Federal Open Market Committee is to ensure that longer-term inflation expectations are well anchored, preventing price increases from becoming a persistent inflation problem.
Speaking about the possibility of a rate cut at the Fed's July policy meeting, Powell said that if inflation pressures remain under control, the time for the Fed to cut rates will come, and it's better to cut sooner rather than later, "but I don't want to point to any specific meeting."
He said that while recent data supports a rate cut, this data reflects the past, and many economists expect that tariffs will cause inflation to rise significantly this year.