Fed Chair Powell Signals Maintaining Rates
(MENAFN) US Federal Reserve Chair Jerome Powell stated on Wednesday that the central bank might maintain the current policy rate as it monitors whether new tariffs will influence inflation, following the Fed's decision to keep rates steady once more.
Powell clarified that no determination has yet been made for the upcoming September meeting.
"We don't do that in advance. We will be taking that information into consideration and all the other information we get," the chair explained during a press briefing held after the Fed’s interest rate announcement.
He emphasized that the present monetary policy stance places the central bank in a strong position to act promptly in response to any upcoming shifts in economic conditions.
The Fed, according to Powell, seeks assurance that President Donald Trump’s tariffs will not result in an increase in inflation before making any moves to reduce interest rates.
"A reasonable base case is that the effects on inflation could be short lived, reflecting a one-time shift in the price level, but it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed," the Fed chair stated.
Powell also reiterated the central bank’s dedication to maintaining a "moderately restrictive" policy direction.
“Our obligation is to keep longer term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” he concluded.
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