Jerome Powell, Chairman of the U.S. Federal Reserve, recently made key statements following the Federal Open Market Committee (FOMC) meeting on June 18, 2025. Highlights include:
♦️Interest rate held: The Federal Reserve kept the target interest rate on federal funds unchanged for the fourth time, in a range of 4.25% to 4.5%.
♦️Impact of tariffs: Powell confirmed that increases in tariffs (customs duties) this year are expected to raise prices and negatively impact economic activity. He emphasized that uncertainty about the level of these tariffs and their duration makes it difficult to assess their full impact.
♦️Waiting for additional data: Powell emphasized that the U.S. economy remains in a strong position, giving the Federal Reserve the ability to wait for additional economic data before making decisions on adjusting monetary policy.
♦️Inflation and the labor market: Although inflation has declined significantly, it remains slightly above the Federal Reserve's 2% target. However, the labor market remains strong, with a low unemployment rate (4.2%) and wage growth.
♦️The Dual Objective: Powell reaffirmed the Federal Reserve's commitment to achieving its dual objective of maximizing employment and ensuring price stability.
♦️Political pressure: Powell faced significant pressure from the Trump administration to lower interest rates, but he maintained that the Federal Reserve's decisions were independent and based on economic data and employment and inflation targets.
Overall, Powell's statements indicate that the Federal Reserve is in a wait-and-see position to assess the impact of tariffs and economic developments before considering changes to its monetary policy 🤔🤔.
