Federal Reserve Chair downplays growing risks of tariff policy to prices and US economy

At a press conference, Federal Reserve (Fed) Chairman Jerome Powell downplayed concerns about President Donald Trump's aggressive trade policies and their impact on price growth.

He described the inflationary impact of tariffs as transitory, and expressed confidence in the sustainability of the country's economy. However, as Powell pointed out, the regulator can't know for sure whether these expectations will be met.

According to the Fed's median forecasts, policymakers still expect two rate cuts this year. That should help allay growing market concerns that inflationary pressures caused by tariffs will prevent the central bank from easing monetary policy in case the economy weakens significantly. This opinion was expressed by Bloomberg experts.

The head of the US central bank also appeared confident about the stability of long-term inflation expectations. At the same time, according to a University of Michigan survey, consumers expect price increases of 3.9% per year over the next 5–10 years. That's the highest rate in more than three decades.

At its last meeting, the Fed left the federal funds rate unchanged at a target range of 4.25–4.5% for the second consecutive time.