Federal Reserve Chairman Jerome Powell suggested that the central bank is unlikely to offer President Trump his highly decisive interest rate cuts anytime soon.
Before and after Trump's tariffs – After a 30-day suspension, it announced its second suspension earlier this week, with strict taxes on Canada and Mexico.
However, Powell on Friday reiterated that the Fed “focuses on separating signals from noise as Outlook evolves.” We don't have to hurry, we are in a good position to wait for it to become clearer. ”
Central bankers should take a waiting approach to Trump's tariffs before considering policy changes, the chairman said in a speech at the US Monetary Policy Forum.
The White House is in the process of implementing major policy changes in four different areas: trade, immigration, fiscal policy and regulation,” he said.
“What is important for the economic and monetary policy pathway is the net effect of these policy changes.”
Powell last month said he would wait for the Fed to make policy changes after a few inflation reports were heated more than expected and then lightly pleaded for hopes for interest rate cuts.
Consumer confidence then plunged 7 points to 98.3 in February, suffering the biggest monthly decline in four years.
The employment report released Friday saw analysts believe the economy is raging as jobs remained relatively stable.
According to the Bureau of Labor Statistics, U.S. employers added 151,000 jobs in February, reaching unemployment rate of 4.1%.
Other analysts were terrified of the unknown as they were looking forward to March's employment report.
However, Powell painted a healthy picture of the economy during his speech, claiming that the employment report is evidence that “the labor market is solid and broadly balanced.”
“Wages are growing faster than inflation and are growing at a more sustainable pace than early in the pandemic recovery,” he said, adding that the US is in a “good place” and that inflation is eased to the Fed's 2% target.
However, he also acknowledged a decline in consumer trust. He tied the worsening feelings to uncertainty about Trump's tariffs. Economists warn that prices could inflate.
“The path to bringing inflation back sustainable to targets is bumpy and we expect it to continue,” Powell said.
Gov. Adriana Kugler, who was not present in the forum, said Friday that the Fed is unlikely to make any significant policy moves in the near future.
In her speech in Portugal, she said, “an important upside risk to inflation” and “it may be appropriate to continue to hold policy rates at current levels for a while.” Investors are mostly looking forward to it The target interest rate will not change In the range of 4.25% to 4.50%, according to CME FedWatch.
