Powell: Tariffs Could Delay Cuts, But Fed Remains Cautious & Data-Driven
Powell held rates steady at 4.25–4.5%, sticking to a forecast of two cuts this year. Core inflation has crept up to ~3.1%—well above target—and tariffs are partly to blame. He cautioned that trade policy could sustain inflation longer, so the Fed will remain patient and flexible. The labor market remains robust, and the central bank is underlining its independence amid political noise.
Key Takeaways:
- Tariffs may push inflation higher and delay rate cuts.
- Cuts likely still on the table, but only later in 2025—and data dependent.
- Fed signaling a more hawkish stance compared to earlier expectations.
For traders, the message is clear: repeated policy shifts are unlikely now, but upcoming economic data—especially on inflation and trade—will be critical for rate outlooks.Readmore
