Jerome Powell, Chairman of the US Federal Reserve, attested to the Congitol Hill in Washington, USA, February 11, 2025 before a hearing from the Senate Banning, Housing and Urban Building Committee on the “Half -year monetary report” in Capitol Hill in Washington, USA, USA.
Craig Hudson | Reuters
New York – The chairman of the Federal Reserve, Jerome Powell, said on Friday that the central bank could wait to see how the aggressive political measures of President Donald Trump have an impact before moving back to interest rates.
With the markets nervously about Trump's suggestions for tariffs and other topics repeated Powell that he and his colleagues have recently advised patience on monetary policy, while high uncertainty has a high degree of uncertainty.
The White House “is in the process of implementing significant political changes in four different areas: trade, immigration, budgetary policy and regulation,” he said in a speech for the US Monetary Political Forum. “It is the net effect of these political changes that are important for the economy and the path of monetary policy.”
Please note that “uncertainty about the changes and their likely effects remain high,” said Powell that the Fed is “concentrated” to separate the signal from the noise while the outlook is developing. We do not have to be in a hurry and are well positioned to wait for greater clarity. “
The comments seem to be at least somewhat in contradiction to the growing market expectations of interest reductions this year.
Since the markets of Trump's shift positions on his agenda – especially its tariff plans – have a price of three quarters by the end of June from June.
Powell's comments, however, show that the FED will be in the waiting-and-sea mode before mapping the further guidelines of the guideline.
“Politics is not on a preset course,” he said. “Our current political attitude is well positioned to deal with the risks and uncertainties with which we follow both sides of our double mandate.”
The Policy forum is sponsored by the Clark Center for Global Markets at the Booth School of the University of Chicago and included several Fed officials in the audience. Most political decision -makers of the Central Bank have recently announced that the economy has been back into the 2% goal of the Fed recently, although the interest climate is still unclear because Trump's politics becomes clearer.
In his assessment, Powell mainly spoke positively in the macro environment and said that the USA was in a “good place” with a “solid job market” and an inflation that changes again.
However, he noticed that recent mood surveys showed concerns about the inflation path, mostly a product of the Trump tariff discussion. The preferred measuring device of the FED showed a 12-month inflation at a speed of 2.5% or 2.6% if food and energy were excluded.
“The way to sustainable return inflation to our goal was bumpy, and we expect this to continue,” said Powell.
The governor of Fed Adriana Kugler, who was not in the forum, said in a speech on Friday in Portugal that she saw “important upswing risks for inflation” and “it could be appropriate to keep the political rate at the current level for some time”.
The remarks also came on the same day when the Ministry of Labor for February reported a profit of 151,000 salary statements in non -colored salary statements. Although the total amount was slightly below the market expectations, Powell said that the report is more evidence that “the labor market is solid and generally in balance”.
“Wages grow faster than inflation and at a more sustainable pace than before in Pandemic recovery,” he said.
The average hourly profit rose by 0.3% in February and rose by 4% annually. The job report also showed that the unemployment rate increased higher to 4.1% with a decline in budgetary employment.