The Takeaway: Powell Holds Steady Amidst Trump's Tariff Tirade
In the face of President Trump's persistent demand for interest rate cuts, Federal Reserve Chair Jerome Powell refused to engage, stating he would refrain from commenting on the president's remarks.
Despite market expectations, the Fed held rates unchanged at 4.25% to 4.50%. Powell's nonpartisan mandate and data-driven approach led him to adopt a "wait and see" stance on the potential impact of Trump's tariffs.
The Fed chair acknowledged the uncertainty surrounding the tariffs, including the targeted goods, duration, and potential retaliation. He emphasized the need to assess these policies before making any adjustments to monetary policy.
Economist Paul Ashworth suggests that the Fed's delayed action could result in no rate cuts in 2025, as inflation rebounds to 3%. The next Fed meeting is scheduled for March 18 and 19, where the central bank will continue to monitor the situation closely.