The Fed has a duty to prevent a one-time spike in prices from becoming an “ongoing inflation problem,“ Powell said in prepared remarks to the House Committee on Financial Services.
Powell’s reiteration that the Fed can wait to lower rates comes after two Fed officials recently expressed openness to cuts as early as in July.
After unveiling the Fed’s latest announcement to keep rates unchanged for a fourth straight policy meeting last week, Powell told reporters that the bank would make smarter decisions if it waited to understand how Trump’s tariffs impact the economy.
“I hope Congress really works this very dumb, hardheaded person, over,“ Trump wrote on his Truth Social platform.
“Increases in tariffs this year are likely to push up prices and weigh on economic activity,“ he said in the prepared remarks.
For now, Powell added: “Despite elevated uncertainty, the economy is in a solid position.”
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