Jerome Powell recently indicated that the Federal Reserve still anticipates two interest rate cuts this year, despite projecting higher inflation due to new tariffs. The Fed held its key rate steady at 4.25%-4.5% in June 2025, marking the fourth consecutive hold.
Powell stressed that while the economy remains "solid" with a low unemployment rate, the impact of tariffs on prices is a significant uncertainty. The Fed aims to gather more data over the summer to assess how these tariffs will affect inflation. While they foresee cuts in 2025, the timing and extent remain dependent on incoming economic data and the evolving trade policy landscape.
