Powell Stresses Fed’s Duty to Combat Rising Inflation Amid Trump Criticism

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Powell Stresses Fed’s Duty to Combat Rising Inflation Amid Trump Criticism

Federal Reserve Chair Jerome Powell recently shared important insights about the U.S. economy and inflation during a press conference. He emphasized the Fed’s aim to control inflation while navigating uncertainties, especially regarding the impact of tariffs introduced by the Trump administration.

Powell described the economy as "solid," with the labor market nearing full employment. Yet, he noted inflation remains above the Fed’s target of 2%. Recent data suggests inflation might rise to 2.3% soon, with the core inflation rate (which excludes food and energy) possibly increasing to 2.6%. In April, these rates were 2.1% and 2.5%, respectively.

Historically, tariffs can cause temporary price hikes, although they don’t always lead to lasting inflation. Powell indicated that the Fed would wait for more data before making any policy changes. He mentioned that maintaining a stable inflation rate is crucial for supporting long-term employment.

Interestingly, the Federal Open Market Committee (FOMC), responsible for setting interest rates, recently decided to keep rates steady. However, there was a divide among members’ future expectations. Some officials anticipate one or two rate cuts by the end of the year, depending on the inflation trends.

Public reaction has been mixed, with some social media users supporting Powell’s cautious approach while others express frustration over the slow pace of change. As discussions continue, market data indicates a 23% chance of a rate cut at the upcoming July meeting, with a higher likelihood of cuts in September.

For those looking for expert insights, economists often highlight the importance of data in shaping monetary policy. According to a report by the Brookings Institution, timely economic data helps the Fed respond effectively to changing conditions, ensuring stability and growth.

In summary, as Powell and the Fed navigate these complex issues, the focus remains on balancing inflation control and support for the labor market, all while adapting to new economic signals. The coming months will be vital in determining the Fed’s next steps. For more details, check out the latest analysis from CNBC and the FedWatch tool.



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