Saturday, March 22, 2025

Earlier, in explaining why rates were being kept unchanged, Powell described the uncertainty faced by Fed policymakers as “unusually elevated.” With overall sentiment sliding due to policy “turmoil,” prices are projected to rise faster than previously expected at least in part, and perhaps largely, because of Trump’s plans to impose duties on imports from U.S. trading partners, Powell said after the Fed announced it had held its benchmark overnight rate steady in the 4.25%-4.50% range.

Fed in no rush to cut rates; Trump disagrees

“We now have inflation coming from an exogenous source,” said Powell, using a term economists employ to describe an outside shock, in this case tariffs that could, if Trump follows through with all his plans, lift the average tax rate on imports to levels not seen since the Great Depression.