Fed Chair Powell Says Tariffs Prevented Interest Rate Cuts

Federal Reserve Chair Jerome Powell stated at the European Central Bank forum that if it were not for President Donald Trump's sweeping tariffs, the Fed would have already cut interest rates. Powell explained that the tariffs led to higher inflation forecasts, prompting the Fed to pause its rate cuts to assess the economic impact prudently. Despite pressure and criticism from President Trump, who has demanded rate cuts and even threatened Powell's position, the Fed remains focused on its goals of price stability, maximum employment, and financial stability. Powell emphasized that the U.S. economy is currently stable with low unemployment and inflation moving toward the 2 percent target when excluding tariffs. He also indicated that a decision on rate cuts depends on upcoming economic data and that the Fed is taking a cautious wait-and-see approach to ensure the economy remains solid before adjusting policy. Powell's remarks highlight the tension between the administration's tariff policies and the Fed's independent monetary policy decisions.