US Federal Reserve Chair Jerome Powell testified at a House Financial Services Committee hearing on June 24, 2025 on Capitol Hill in Washington, DC, about the “Federal Reserve Semi-Annual Monetary Policy Report.”
Saul Roeve | AFP | Getty Images
Federal Reserve Chairman Jerome Powell said Tuesday that the US Central Bank would have an easy monetary policy to date without President Donald Trump’s tariff plans.
When asked during the panel whether the Fed would have lowered the fees again if Trump did not announce tax plans to many foreign trade partners earlier this year, Powell said, “I think that’s right.”
“We were put on hold when we saw virtually the scale of tariffs and essentially all US inflation forecasts have risen substantially as a result of tariffs,” Powell added at an event held at the European Central Bank Forum in Sintra, Portugal.
Powell’s entry comes when the Fed enters an interest rate holding pattern despite increasing pressure from the White House.
The Fed again stabilized its key borrowing rate last month. As a result, borrowing costs have been in the target range of 4.25% to 4.5% since December.
The central bank’s Federal Open Market Committee has shown that two cuts could be possible by the end of 2025 through so-called dot plots. However, Powell said at a press conference last month that the Fed is “well located” to stay in standby mode.
When asked Tuesday if July was too early for rate cuts, he said “I can’t really say it,” and “it’s going to depend on data.” According to the CME FedWatch tool, FED Funds Futures Traders priced central banks as more than 76% of the chances they could be stable again in their July policy collection.
“We’re going out to meet at meetings,” Powell said on a panel Tuesday. “I don’t meet from the table or put it directly on the table. That will depend on the evolution of the data.”
Powell’s future with the Fed
The Fed’s relentless position captured the wrath of Trump and his administration. Last week, Trump was called Powell “terrifying” and he said he was “a very average mental person.”
When asked on Tuesday if he would remain as federal governor after his chair term ends next year, Powell replied, “I have nothing for you today.” Powell’s term as governor is expected to be encountered in 2028, but his chair role ends in 2026.
Global trade policy and Trump’s attack on Powell won center stage at the event Tuesday. There, the US FED Chief was adjacent to the panel by other central bank leaders around the world. Other international central bank leaders have asked whether they will act in his position the same way as Powell, and whether foreign countries are away from the United States.
Once Trump continues again, tariff policy once again has dominated global markets and monetary policymakers. The US President announced plans for broad taxation in several foreign countries in early April, but delayed many of the most intense tariffs shortly after the US market fell.
The US stock market is more than the recovered losses recorded in the wake of Trump’s first announcement, with the S&P 500 returning to its recent all-time high. However, market participants and monetary policy leaders still report uncertainty about the future of global trade and the impact on the stock market and the world economy.
“All I want is to provide an economy with price stability, maximum employment and financial stability for everyone at the Fed,” Powell said. “Walking at night is how do you get it done? I want to hand over the old economy in good condition.”
