"In effect, we went on hold when we saw the size of the tariffs and where essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs."
"So we didn't overreact. In fact, we didn't react at all. We're simply taking some time – as long as the U.S. economy is in solid shape, we think the prudent thing to do is to wait and learn more and see what those effects might be. And again, they haven't really shown up, and so for now we're waiting."
Earlier in the conversation, Powell noted that the U.S. economy is in a "pretty good position" with inflation having trended closer to the Fed's 2% goal in recent years, while the unemployment rate at 4.2% is a sign of a healthy labor market.
"Ignore the tariffs for a second – inflation is behaving pretty much exactly as we have expected and hoped that it would," Powell said.
Powell went on to say that the Fed expects there will be higher inflation readings later this summer as tariff costs make their way through supply chains, though he said policymakers will monitor whether those impacts are greater or less than anticipated.
"We haven't seen effects much yet from tariffs, and we didn't expect to by now," Powell said. "We've always said that the timing, amount and persistence of the inflation would be highly uncertain and it's certainly proved that."
"So we're watching, we expect to see over the summer some readings, higher readings. But we're prepared to learn that it can be higher or lower or later or sooner than we'd expected," he added.
https://www.msn.com/en-us/money/markets/fed-chair-powell-confirms-tariff-concerns-prevented-interest-rate-cuts-so-far-this-year/ar-AA1HMyrr?ocid=BingNewsVerp
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