Federal Reserve (Fed) Chairman Jerome Powell admitted that the US central bank was ready to ease monetary policy if it weren’t for President Donald Trump’s tariff plans.
Speaking at the European Central Bank forum in Sintra, Portugal, Powell said the Fed was taking a cautious approach after Trump announced plans to impose higher tariffs on imported goods.
He stressed that they were holding back on cutting rates because of the size of the announced tariffs and the projected future inflation in the United States.
This statement was made as the Fed continued to maintain interest rates, despite increasing pressure from the White House.
At its meeting last month, the Fed again kept its key lending rate at a range of 5.25% to 5.5%, a level it has maintained since December.
Members of the Federal Open Market Committee (FOMC) expect two more rate cuts by the end of 2025.
The Fed’s refusal to cut rates has continued to anger President Donald Trump, who has been vocal in criticizing Powell.
Trump, who has long been dissatisfied with current monetary policy, labeled Powell as "terrible" and claimed he had mental problems.
The criticism came as Trump expressed frustration with the Fed's decision to keep rates high despite mounting political and economic pressure.
