Fed Chair Powell Signals Potential Rate Cut
During a news briefing following the Fed's policy announcement, Powell mentioned he anticipates seeing “the effects of tariffs flowing through goods prices peaking and then starting to come down, assuming there are no new major tariff increases that are begun.”
He added, “And that’s what we expect to see over the course of this year. If we see that, that would be something that tells us that we can we can loosen policy.”
The Federal Reserve opted to maintain the policy rate within the 3.5% to 3.75% range, highlighting that economic activity has been progressing at a "solid" pace.
Powell also indicated that the US economic growth outlook appears more robust than it did last year. “If you look at the incoming data since the last meeting, there is clear improvement in the outlook for growth,” he said. “Inflation performed about as expected, and as I mentioned, some of the labor market data came in suggesting evidence of stabilization. So, it’s overall, a stronger forecast, really.”
He further noted, “The US economy expanded at a solid pace last year and is coming into 2026 on a firm footing. While job gains have remained low, the unemployment rate has shown some signs of stabilization and inflation remains somewhat elevated.”
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