Federal Reserve chair blames Trump's tariffs for preventing interest rate cuts [View all]
Source: The Guardian
Tue 1 Jul 2025 11.21 EDT
Last modified on Tue 1 Jul 2025 15.18 EDT
The chair of the Federal Reserve, Jerome Powell, has blamed Donald Trump’s tariffs for preventing the immediate interest rate cuts the president has demanded. Trump has repeatedly urged Powell to reduce borrowing costs in the US economy. On Tuesday, he said: “Anybody would be better than J Powell. He’s costing us a fortune because he keeps the rate way up.”
He spoke not long after Powell told a European Central Bank (ECB) event in Portugal that the Fed was waiting to assess the inflationary impact of the president’s trade policies.
Speaking on a panel of central bankers in Sintra, the Fed chair said: “In effect we went on hold when we saw the size of the tariffs. Essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn’t overreact, in fact we didn’t react at all. We’re simply taking some time.”
Asked if the Fed would have cut its key Fed funds rate further, from the current target range of 4.25-4.5%, if it wasn’t for tariffs, Powell said: “I think that’s right.”
Read more: https://www.theguardian.com/us-news/2025/jul/01/federal-reserve-chair-blames-trump-tariffs-for-preventing-interest-rates-cut
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