US Federal Reserve Chair Jerome Powell has signaled that the central bank can afford to wait for the impact of tariffs before deciding on further interest rate cuts. Despite President Donald Trump’s calls to slash levels, Powell said the Fed is well-positioned to learn more about the likely course of the economy before considering adjustments to its policy stance.
Powell warned that a one-time spike in prices could become an “ongoing inflation problem” and emphasized the need for caution when it comes to potential inflation risks. He also expressed openness to lowering rates sooner if inflation is weaker than expected or if the labor market deteriorates.
The Fed has held the benchmark lending rate steady this year, with Powell citing a range between 4.25% and 4.50%. While there is growing divergence among policymakers about whether it can lower rates at all in 2025, a “significant majority” of the committee still feels it will be appropriate to reduce rates later this year.
Powell’s comments come as Trump again urged him to slash rates, saying they should be “at least two to three points lower”. The Fed chair pushed back on these calls, saying that its focus is on delivering a good economy for the benefit of the American people.
Source: https://punchng.com/no-rush-for-rate-cuts-despite-trump-pressure-says-us-fed-chair