Posted on 07/01/2025 6:45:23 PM PDT by SeekAndFind
Federal Reserve Chair Jerome Powell said Tuesday that the U.S. central bank would have eased monetary policy by now if not for President Donald Trump’s tariff plan.
When asked during a panel if the Fed would have lowered rates again this year had Trump not announced his controversial plan to impose higher levies on imported goods earlier this year, Powell said, “I think that’s right.”
“In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell said at European Central Bank forum in Sintra, Portugal.
Powell’s admission comes as the Fed has entered a holding pattern on interest rates despite mounting pressure from the White House.
The Fed last month held the key borrowing rate steady once again, keeping fed funds at the same range between 4.25% and 4.5% where it’s been since December.
The central bank’s policy-setting Federal Open Market Committee indicated via its so-called dot plot of members’ projections that there could be two cuts by the end of 2025. However, Powell also said at a press conference last month that the Fed was “well positioned” to remain in a wait-and-see mode.
On Tuesday, Powell was asked if July would be too soon for markets to expect a rate cut. He answered that that he “really can’t say” and that “it’s going to depend on the data.” Fed funds futures traders are pricing in a more than 76% likelihood that the central bank once again holds rates steady at the July policy gathering, according to the CME FedWatch tool.
“We are going meeting by meeting,” Powell said during Tuesday’s panel. “I wouldn’t take any meeting off the table or put it directly on the table...
(Excerpt) Read more at fortune.com ...
“Yeah, I coulda woulda shoulda if’n only he hadna shouldna oughtna.”
What an idiot. Tariffs have absolutely zero relationship to Monetary inflation.
He should know this, or he’s trying to perpetuate the confusion.
Maybe Trump and his team will figure out that is the safe way for now.
Trumps tariffs have brought in so far $121 billion!
This is cnbc reporting. Look at the chart.
The money line is going nearly straight up and this is just the beginning.
https://x.com/RapidResponse47/status/1939705331174756785
Why didn't you say that when you had every ones attention
It’s more complicated than that. Long-term rates on T-bills, which should have nothing to do with the Federal Reserve, had remained around the 5% range for much of this year. The U.S. dollar has lost 16% of its value this year already. A rate cut in those circumstances would be disastrous.
Your analysis makes a lot more sense than Fed Chairman Powell. Price increases (if any} due to tariffs are NOT inflationary in the normal sense. Inflation we should worry about comes from an overheating economy, when consumers ignore increases and spend, spend, spend, thus spiking demand. This gives producers room to increase the cost of their goods. Tariffs, if passed through to consumers, do the opposite, depressing demand from consumers. This, in turn, would flatten or decrease inflation.
Extra revenues as a justification for continuing high rates. What will they think of next.
WHY is this man still in that position? It’s like Leaving Fauci in charge of public health.
Unfortunately, TDS “economists” have a more pessimistic outlook, and they influence some WSJ types.
What was Powell doing while the Biden Gang was wasting trillions?
“”What was Powell doing while the Biden Gang was wasting trillions?””
Wasting trillions, grifting billions, and allowing an invasion of illegals, including terrorists, from all corners of the world. He was helping the Democrats by cutting interest rates, natch.
Raising the Fed Funds rate, in fact.
SCREW POWELL, AND FIRE HIM. HE’S WRONG.
Raising rates
I’m sure Powell had nothing to say during the Biden administration. He didn’t have a President in office publicly complaining about him on a daily basis. LOL.
Thanks for the info. It’s always good to hear from freepers who have knowledge of that stuff.
Your point is correct, and especially so with Trump’s policies of import substitution, aggressive regulation cutting, and energy cost reduction.
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