Federal Reserve chair Jay Powell has signalled he would push back on calls for interest rate cuts as soon as July, saying the US economy remains “solid” and the effects of President Donald Trump’s trade war and other policy changes are “uncertain”.
Two members of the Fed’s board — Chris Waller and Michelle Bowman — have said in recent days that they would support a cut at the Fed’s next rate-setting vote in July, saying recent inflation readings suggested that Trump’s tariffs would have less impact on prices than feared.
While Powell on Tuesday is set to acknowledge that the impact of Trump’s tariffs is now expected to be less dramatic than predicted in April, he will tell Congress that “increases in tariffs this year are likely to push up prices and weigh on economic activity”.