Powell Observes No Signs of Economic Weakness
During a discussion on the labor market’s resilience, Powell expressed that he currently sees no indicators suggesting a downturn in the U.S. economy. “The U.S. economy has consistently defied expectations of weakness over the past three years, which has been remarkable. Time and again, forecasts predicted a downturn, but as of now, those signs are absent,” he stated.
— Lisa Kailai Han
Powell: Tariffs Will Increase Costs for Consumers
Federal Reserve Chair Powell remarked on Wednesday that tariffs inevitably lead to higher costs for both businesses and consumers. “Forecasts suggest a notable rise in inflation in the coming months due to tariffs, as costs must ultimately be absorbed by someone in the distribution chain, whether manufacturers, importers, retailers, or consumers,” he explained.
— Brian Evans
Fed Appears Willing to Trade Employment for Low Tariff Inflation
Byron Anderson, head of fixed income at Laffer Tengler Investments, indicated that the Federal Reserve might be prioritizing low tariff inflation at the expense of employment and GDP growth. He noted that the Fed’s choice to maintain current interest rates was predictable. “The Fed has shifted focus from long-term data to short-term indicators regarding rising inflation, seemingly fixated on tariff inflation,” he commented.
— Lisa Kailai Han
Powell: Rate Projections Lack Conviction
Fed Chair Powell advised caution regarding the “dot plot,” as the economic landscape remains uncertain. “What we observe is individuals projecting their expectations amid significant uncertainty. No one has firm confidence in these rate paths,” Powell remarked, suggesting that the projections reflect individual expectations for rates, which indicate a potential for two reductions this year.
— Yun Li
Tariff Effects on Inflation Still Evolving
Fed Chair Powell mentioned that the complete impact of tariffs has yet to materialize in consumer prices. “Tariffs take time to influence the distribution chain, with goods arriving months before tariffs are enacted. We are starting to observe some effects, and we expect further developments in the upcoming months,” he stated.
— Jesse Pound
Increasing Inflation Expectations Linked to Tariffs
In his initial comments, Powell pointed out a recent rise in inflation expectations, potentially associated with tariffs. “Short-term inflation expectations have increased recently, as shown by both market indicators and consumer surveys, with tariffs frequently mentioned as a key factor,” he noted, while reassuring that longer-term expectations align with the target inflation goal of 2%.
— Jesse Pound
