Federal Reserve Chair Jerome Powell signaled a cautious policy stance on Friday, hinting that slowing economic momentum is not yet enough to ease the Federal Reserve’s inflation concerns, as higher tariffs threaten to complicate the path toward price stability.
Speaking at the Society for Advancing Business Editing and Writing conference, Powell said the economy is still “in a good place,” but acknowledged that growing uncertainty tied to trade and regulatory changes has raised the risk of both slower growth and rising inflation.
Just minutes before Powell took the stage, President Donald Trump took to Truth Social, urging the Fed chair to act swiftly: “This would be a perfect time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly.”
Trump claimed that energy prices, interest rates, and inflation have all declined—highlighting that even egg prices have dropped 69%—while job growth has surged in just two months, calling it “a big win for America.”
Fed Faces New Trade-Induced Inflation Pressures
While Powell reaffirmed the Fed’s commitment to its dual mandate—maximum employment and stable prices—he didn’t shy away from addressing the challenge posed by rising tariffs.
He said the increases will likely be “significantly larger than expected” and warned that “higher …