Federal Reserve Chair Jerome Powell emphasized the importance of waiting to gauge the effects of tariffs on U.S. prices before considering interest rate cuts, resisting pressure from President Donald Trump for immediate action. Trump criticized Powell on social media, linking the Fed's decisions to economic uncertainty stemming from his administration's policies. Powell acknowledged that tariffs might increase prices, complicating the Fed's efforts to control inflation. He indicated an openness to the idea that the impact of tariffs could be less severe than anticipated.
"The effects of tariffs will depend, among other things, on their ultimate level. Expectations of that level, and thus of the related economic effects, reached a peak in April and have since declined."
"We will be paying for his incompetence for many years to come," the president wrote on his Truth Social platform, undermining the Fed's independence.
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