Speaking to Congress for his semiannual monetary policy report, Fed Chair Jerome Powell said it’s unlikely the Federal Reserve will consider lowering interest rates.
“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,” The Fed leader stated.
Federal Reserve officials kept their benchmark lending rate at a range of 4.25% to 4.5%.
Powell’s latest comments come as Fed officials side with President Trump in urging banks to lower borrowing costs. “The effects on inflation could be short lived — reflecting a one-time shift in the price level. It is also possible that the inflationary effects could instead be more persistent.”
According to Powell, the Fed “expect a fairly substantial wave of price increases to come through to the consumer.”
“Inflation has eased significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2 percent longer-run goal. Estimates based on the consumer price index and other data indicate that total personal consumption expenditures (PCE) prices rose 2.3 percent over the 12 months ending in May.”
Powell noted that Trump’s tariffs will likely have some effect on the economy, although the full impact is still unclear.
By CEO NA Editorial Staff
