WASHINGTON (dpa-AFX) - Despite intense pressure from President Donald Trump to lower interest rates, Federal Reserve Chair Jerome Powell on Tuesday indicated the central bank is likely to remain on hold.
'For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' Powell said in prepared remarks before the House Financial Services Committee.
Powell noted that economic effects of policy changes, including increases in tariffs on U.S. trade partners, remain uncertain.
'The effects on inflation could be short lived-reflecting a one-time shift in the price level,' Powell said. 'It is also possible that the inflationary effects could instead be more persistent.'
He added, 'Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored.'
Powell stressed that the Fed's obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in prices from becoming an ongoing inflation problem.
'As we act to meet that obligation, we will balance our maximum-employment and price-stability mandates, keeping in mind that, without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans,' he continued.
The Fed Chair's remarks come as Trump has repeatedly criticized him for failing to lower interest rates.
'I hope Congress really works this very dumb, hardheaded person, over,' Trump said on Truth Social ahead of Powell's appearance. 'We will be paying for his incompetence for many years to come.'
The Fed's next monetary policy meeting is scheduled for July 29-30, with CME Group's FedWatch Tool currently indicating an 83.5 percent chance the central bank will leave rates unchanged.
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