Federal Reserve Chair Jerome Powell on Tuesday acknowledged that the central bank likely would have cut interest rates this year if not for President Donald Trump’s tariff hikes.
“I think that’s right,” Powell said when asked if the Fed would have eased monetary policy without the tariff plan. Speaking at the European Central Bank forum in Portugal, Powell said tariffs raised inflation forecasts “materially,” prompting the Fed to hold steady.
The central bank’s benchmark rate has remained between 4.25% and 4.5% since December. Powell said the Fed is taking a “meeting by meeting” approach, with decisions dependent on incoming data.
Trump recently slammed Powell as “terrible” and “very average mentally.”
Powell declined to say whether he would continue after his chair term ends in 2026, stating only that he wants to leave behind a stable economy.
