In a dynamic session on Capitol Hill, Fed Chair Jerome Powell explained that the U.S. Federal Reserve is holding off on rate cuts until the full impact of rising tariffs becomes clear. Despite calls for immediate action, Powell emphasized that the Fed needs more data on whether these tariffs will push domestic inflation higher.
Powell noted that the increases in tariffs could eventually lead to higher prices on everyday items and may dampen economic activity as early as this summer. He made it clear that the Fed's focus is on keeping inflation under control—if inflation pressures remain contained, then a rate cut could come sooner than expected.
Last week, the Fed voted to leave the federal funds rate unchanged at 4.25 to 4.5 percent while forecasting higher unemployment and inflation in the years ahead. This measured, data-driven approach reflects a cautious strategy that lets the numbers speak for themselves.
Recent surveys also show a dip in consumer confidence. With concerns about rising prices and economic uncertainty spurred by tariff policies, many are feeling the pressure. As always, the Fed will keep a close eye on these trends to balance policy decisions with the evolving economic landscape. Stay tuned for more updates on these shifts in the U.S. economy! 🚀
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Powell says U.S. Fed can wait on rate cuts due to tariff impacts
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