Fed Chair Powell would have cut rates if not for tariffs, citing increased inflation

From CNBC: 2025-07-01 14:45:00

Federal Reserve Chair Jerome Powell stated that the central bank would have already lowered interest rates if not for President Trump’s tariff threats. Powell cited increased inflation forecasts due to tariffs as the reason for the Fed’s hold on rates. The Fed is currently projecting two rate cuts by the end of 2025.

Powell’s position has drawn criticism from the White House, with Trump publicly attacking him for not lowering borrowing costs. When asked about his future at the Fed after his term ends in 2026, Powell remained non-committal. Global trade policy and Trump’s attacks on Powell were key topics at a recent event with central bank leaders.

Trump’s fluctuating tariff policy has caused uncertainty among investors and policymakers. Despite the stock market rebounding from initial losses due to tariffs, concerns remain over the impact on global trade and economic growth. Powell emphasized the Fed’s goal of delivering a stable economy and expressed a desire to leave a strong economy for his successor.

Read more: Powell confirms that the Fed would have cut by now were it not for tariffs