Federal Reserve Chair Jerome Powell expressed significant uncertainty at the annual summit of the Federal Reserve in Jackson Hole, Wyo., regarding the impact of President Trump’s policies. Powell suggested that the Fed could cut rates as the job market weakens, highlighting the need to determine whether Trump’s tariffs, immigration restrictions, and tax cuts will be temporary or permanent changes in the U.S. economy. The weakening of the U.S. labor market could push the Fed to slash interest rates at a point to be determined. Powell faced two conflicting trends: rising inflation, which would call for higher rates, and a weakening labor market, which would lend support for cuts. He emphasized the need to balance both sides of the dual mandate when goals are in tension. Powell also noted that while Trump’s tariffs are clearly visible, it is not yet clear if they will lead to a one-time increase in prices or trigger a longer-term inflation surge.
Powell is preparing to increase the rate cut, but he is also highlighting the potential for inflation risks. ThuyTruongSpa 606
