Fed Chair Powell Highlights Temporary Tariff Effects and Economic Framework

According to PANews, Federal Reserve Chair Jerome Powell stated that the effects of tariffs on prices are temporary and considered a reasonable baseline scenario. He noted that the stable unemployment rate allows the Federal Reserve to be more cautious when adjusting its policy stance. Powell emphasized the importance of preventing one-time price increases from evolving into persistent inflation issues and introduced a new framework to accommodate various economic conditions. Additionally, Powell highlighted the downside risks facing the employment situation. Following his remarks, traders increased the probability of a Federal Reserve rate cut in September from 75% to approximately 90%.