Federal Reserve chair blames Trump’s tariffs for preventing interest rate cuts
www.theguardian.com
Jerome Powell says inflationary impact of the president’s trade policies needs to be assessed before borrowing costs can be reduced

cross-posted from: https://sh.itjust.works/post/41342277

Speaking on Tuesday on a panel of central bankers organised by the European Central Bank (ECB) in Portugal, Powell said the Fed was waiting to assess the inflationary impact of the president’s trade policies.

“In effect we went on hold when we saw the size of the tariffs,” Powell told the event in Sintra. “Essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn’t overreact, in fact we didn’t react at all, We’re simply taking some time.”

Asked if the Fed would have cut its key Fed funds rate further, from the current target range of 4.25-4.5%, if it wasn’t for tariffs, Powell said: “I think that’s right.”