Powell delays rate cuts, prioritizes evidence of tariff-driven inflation before considering changes

From Quiver Quantitative: 2025-06-25 01:00:00

Federal Reserve Chair Jerome Powell informed Congress that higher tariffs will lead to increased consumer prices by mid-summer, delaying any rush to lower borrowing costs. The Fed maintains a benchmark rate of 4.25%–4.50%, signaling patience and no immediate changes. Powell emphasized the need for clear evidence of tariff-driven inflation before considering rate cuts. Investors are now anticipating easing in September rather than July, in response to Powell’s cautious approach. The Fed remains neutral on trade policy, focusing solely on inflation impacts and maintaining independence and credibility. Powell stated that the Fed will adjust its stance once the effects of tariffs become clearer, balancing economic growth and stability.



Read more at Quiver Quantitative: Powell Defers Rate Cuts, Seeks Clear Tariff Pass-Through in Summer CPI