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2025-07-31 03:13:06
Federal Reserve Chairman Powell said the Fed can maintain stable interest rates while waiting to see whether tariff policies will push up inflation. He said higher tariffs are beginning to be more clearly reflected in the prices of some commodities, but their overall impact on economic activity and inflation remains to be seen. A "reasonable baseline scenario" might be that the impact of tariffs on inflation will be "transient." However, he also warned that tariffs could make inflation changes "more persistent." He added that the Fed's responsibility is to maintain stable longer-term inflation expectations and prevent a one-time increase in price levels from evolving into a persistent inflation problem. The Fed is currently in a favorable position to learn more about the possible direction of the economy and the evolving balance of risks before adjusting its policy stance. He believes that the current policy stance is suitable for preventing inflation risks. (Refinitiv)
