Fed Chair Signals Rate Cut If Trump Drops Tariff Plans
Federal Reserve Chair Jerome Powell indicated that the U.S. central bank could lower interest rates this year — but only if President Donald Trump backs off plans to impose new import tariffs. Speaking at the ECB forum in Sintra, Portugal on July 1, Powell explained that earlier expectations for rate cuts were delayed due to Trump's tariff proposals, which pushed inflation forecasts higher.
Currently, the Fed’s benchmark interest rate remains steady at 4.25–4.5% since December 2024. While Powell acknowledged that a rate cut is possible, he emphasized it depends on incoming economic data and declined to confirm whether a July cut would be too soon.