Signal from Fed Chair Powell: Interest Rates Will Not Be Cut Anytime Soon
Washington D.C. - Federal Reserve Chair Jerome Powell, in his testimony on Tuesday (6/24/2025), signaled clearly that the central bank of the United States is not in a hurry to cut its benchmark interest rates. Powell emphasized that the Fed is in a strong position to wait and observe further economic data.
In his testimony, Powell stated that although inflation has eased from its peak, levels "remain somewhat high." This is the main reason behind the Fed's cautious stance. "We are not ready to cut interest rates," was the conclusion of his message.
On the other hand, Powell described the condition of the U.S. labor market as "still solid." The strength of the labor market provides a cushion for the economy and gives the Fed room to maintain a tighter monetary policy longer to ensure that inflation is truly under control.
Powell also highlighted external risks, particularly from tariff policies. According to him, the implementation of tariffs "is likely to push inflation up while also being a burden for the economy." These concerns add to the reasons for the Fed to remain vigilant.
Overall, Powell's message is very clear: there are no immediate signals regarding the timing of interest rate cuts. The Fed will continue to rely on incoming data before making its next important decision, with the primary focus on sustainably bringing inflation back to the 2% target.