Federal Reserve Chair Jerome Powell has not ruled out the possibility of interest rate cuts in 2025. Speaking before the House Financial Services Committee, he emphasized that any policy changes will depend on incoming economic data – particularly inflation and the effects of trade tariffs.

🏛 Fed Takes a Wait-and-See Approach

According to Powell, there is currently no plan for an immediate rate cut. Although the U.S. economy is navigating turbulent conditions, the central bank is choosing to wait for clearer signals. “We are well-positioned to wait and see how inflation evolves,” Powell stated, noting that June and July inflation data will be crucial.

Tariffs imposed in recent years could continue to affect consumer prices, which is why the Fed remains open to various scenarios. “The impact may be smaller than expected – but we need certainty,” he added.

📉 Inflation and Tariffs as Key Unknowns

Powell acknowledged that the full effects of previous tariff measures are not yet evident. The Fed needs more time to assess whether higher import duties are driving prices upward or if the market is adjusting to the changes. Only then can a decision on rates be made.

💵 Dollar’s Strength Remains Unshaken

Despite concerns about the economic effects of tariffs, Powell dismissed speculation about the U.S. dollar’s global status. “Talks about the dollar’s decline are exaggerated,” he said. He noted that recent volatility in U.S. Treasuries did not harm the dollar’s position as the world’s reserve currency.

🧮 Concerns Over U.S. Fiscal Trajectory

Powell also acknowledged that the country’s debt path is unsustainable. While avoiding direct commentary on fiscal or immigration policy, he stated that the current fiscal course “is not healthy in the long term.”

🔥 Schiff Warns of Economic Crisis Ahead

Economist Peter Schiff holds a starkly different view from Powell. He has long criticized the Fed’s monetary policy, arguing that inflation is not being driven by tariffs, but by the Fed’s own actions — particularly the prolonged period of ultra-low interest rates.

Schiff warns that the U.S. is headed for a combination of recession and high inflation — stagflation — and even suggests hyperinflation is possible. He fears global investors could begin to exit U.S. markets, further weakening the dollar. “All the inflationary chickens the Fed let loose over the last decade are coming home to roost,” Schiff remarked.




#JeromePowell , #Fed , #Tariffs , #Inflation , #GlobalMarkets

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