US Fed chair reiterates cautious stance on rushing to cut interest rates
US Federal Reserve Chair Jerome Powell has reiterated his cautious stance on rushing to cut interest rates. He cited the need to assess how tariff measures by President Donald Trump's administration will affect the economy.
Powell told a House committee on Tuesday that "increases in tariffs this year are likely to push up prices and weigh on economic activity."
He said, "The effects on inflation could be short-lived," but added, "It is also possible that the inflationary effects could instead be more persistent."
Powell continued, "For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance."
He argued that the Fed does not need to rush to reduce interest rates because the economy and the labor market are "strong."
Trump has repeatedly called on the Fed to slash rates since the start of his second presidential term.
Two senior Fed officials have also expressed support for rate cuts as early as the July policy board meeting, if certain conditions are met. They are Vice Chair for Supervision Michelle Bowman and board member Christopher Waller.
Upcoming data on prices and employment are expected to be closely watched as key indicators for the direction of monetary policy.
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