US Federal Reserve Chair Jerome Powell will speak at a press conference following the Federal Open Market Committee meeting held in Washington, DC on June 18, 2025.
Saul Roeve | AFP | Getty Images
Federal Reserve Chairman Jerome Powell on Tuesday highlighted the central bank’s commitment to curbing inflation, saying he hopes policymakers will be put on hold until they better deal with the impact they have on prices.
In a statement to be presented to two parliamentary committees this week, Powell characterized economic growth as strong and the labour market as fully employment.
However, he noted that inflation is still above the Fed’s 2% target due to the effects of President Donald Trump’s tariffs still unclear.
“Policy changes continue to evolve and their impact on the economy remains uncertain,” Powell said. “The impact of tariffs depends, among other things, on the ultimate level.”
Repeating what became a familiar language from Fed chief, Powell said policymakers are “well well positioned to wait to learn more about possible economic courses before considering adjustments to policy attitudes.”
The cautious tone could be even more hostile to Trump, who has bolstered his longtime criticism of Powell. On his latest broadside, Trump, posted on the president’s truth social platform early Tuesday, said he hopes “Congress is really this stupid, hard guy, too work.”
Powell will present his comments on Tuesday morning first to the House Financial Services Committee and then to the Senate Banking Committee, along with the Fed’s monetary policy report.
I saw inflation drifting away
Most of the speeches were the boilerplate language that Powell used to describe the economy, and he said he would “remaintain solid.”
However, inflation, the Fed’s priority measures are likely to reach 2.3% in May, and the core measure, which excludes food and energy, is likely to move up to 2.6%. The respective measurements for April were 2.1% and 2.5%.
Tariffs have historically resulted in one-off price increases, and sometimes they are responsible for long-term inflationary pressures. Powell said he and his colleagues on the Federal Open Market Committee will not feel rushed to adjust that balance and policy in a hurry until more data is available to see how the tariffs work this time. FOMC is the pricing department of the central bank.
“The FOMC’s obligation is to fully secure long-term inflation expectations and prevent a one-time increase in price levels from becoming an ongoing inflation problem,” Powell said. He added that the Fed will try to balance full employment and low inflation dual targets.
The FOMC voted unanimously last week to stabilize interest rates.
However, the future expectations of individual members – an update to the “dotplot” grid showed division between members. Nine of the 19 staff members supported zero or one cut this year, while eight saw two cuts and two others expect three. The plot is anonymous, so there is no way to know the outlook for individual members.
But for the past few days, two major FOMC voters, Gov. Michelle Bowman and Christopher Waller, said they support the July decline as long as inflation data is curtailed. The consumer price index rose just 0.1% in May, reflecting other indicators that have shown that previous price pressures have subsided from tariffs.
According to CME Group’s FedWatch gauge, futures market prices show that there is only a 23% chance of a cut at the July 29th-30 meeting, indicating that the next cut is much higher in September.
