RATE CUTS DELAYED
Powell was also asked about the recent public criticism levelled at him and the Fed by senior government officials, including the president, who has called for him to cut rates to boost economic growth.
An upbeat Powell said Trump’s criticism did not affect the Fed’s job of tackling inflation and unemployment “at all”.
“We are always going to consider only the economic data, the outlook, the balance of risks, and that’s it,” he added.
Following the April tariff rollout, many analysts pared back or delayed their expectation of rate cuts for this year, predicting that tariffs will push up prices and slow growth, at least in the short run.
“The best course of action for the FOMC may simply be to wait for more clarity about trade policy and its implications for the US economy,” Wells Fargo chief economist Jay Bryson wrote in an investor note after the decision was published by the Fed’s rate-setting Federal Open Market Committee.
“While the Fed is, and should be, focused on the fragility of inflation expectations, we expect that by late summer labour market weakness will prompt a policy response,” JPMorgan chief economist Michael Feroli wrote in a note to clients, pencilling in a first rate cut for September.