00:00 Josh Lipton
Federal Reserve chair Jerome Powell, speaking in Portugal on Tuesday, told a gathering held by the European Central Bank that the US Central Bank may have changed their plans for the fight against inflation if not for the president’s trade deals. Yahoo! Finance’s Jennifer Schonberger has more.
00:18 Jennifer Schonberger
Hey there, Josh. Fed chair J. Powell didn’t take a rate cut off the table for the Fed’s next policy meeting later this month. And as you said, said that if it weren’t for tariffs, the Fed would already be cutting rates.
00:31 Jerome Powell
and on the data and um we we are going meeting by meeting. I mentioned um, you know, how I’m thinking about that, but I wouldn’t take any meeting off the table or put it directly on the table. It’s going to depend on how the how the data evolve.
00:53 Jennifer Schonberger
Powell noted that a quote “solid majority” of the Fed’s interest rate setting committee thinks it will be appropriate to begin lowering interest rates at some point later this year, explicitly saying in the remaining four interest rate setting meetings, which would include the next meeting in July. When asked if the Fed would begin already cutting rates had it not been for tariffs, Powell had this to say.
01:17 Jerome Powell
I think that’s right. We’re, in effect, we went on hold uh when we when we saw the size of the tariffs and where and essentially all all inflation forecasts for the United States went up materially as a consequence of the tariffs.
01:34 Jennifer Schonberger
Powell reiterated that the Fed has not seen much of an impact yet from tariffs on inflation, noting that the central bank expects to see, quote, “some higher readings on inflation”, but that officials are prepared to learn, and that inflation could be higher, lower, later, or sooner than expected. Powell has roughly 10 months left in his term as chair. And when asked what keeps him awake at night, he says he wants to turn over an economy to his successor that is in good shape. Asked whether he would remain on as a Fed governor after his term ends as Fed chair next May, Powell said “I don’t have an answer for you today.” Josh.
02:12 Josh Lipton
Thank you, Jen.
